Oil price drops more than 5% on pressure from Chinese data

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Oil prices fell more than $5 a barrel on Monday on demand fears, as disappointing economic data from China renewed worries about a global recession.

Brent crude futures were down $5.19, or 5.29%, to settle at $92.96 a barrel at 10:08 am ET, after losing 1.5% last Friday.

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US crude (WTI) was down $5.01, or 5.44%, to $87.08, after falling 2.4% in the previous session.

Open interest for Brent crude this month is down 20% from August last year.

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“The open interest is still going down, with some (market players) not interested in touching it because of volatility. That is, in my opinion, the reason that results in higher volumes to the downside,” said UBS oil analyst Giovanni Staunovo, adding that the trigger for the dip on Monday was weak Chinese data.

In China, the world’s biggest oil importer, the central bank cut lending rates to revive demand as data showed the economy unexpectedly slowing in July, with manufacturing and retail activity pressured by Beijing’s zero Covid policy and a real estate crisis.

China’s refinery output fell to 12.53 million barrels per day (bpd), the lowest level since March 2020, government data showed.

Source: CNN Brasil

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