Oil fell as disappointing Chinese economic data and a resumption of Libyan production undercut signs of a tightening market.
West Texas Intermediate fell to near $74 a barrel and closed at its lowest price in a week on Monday after protesters abandoned Sharara, one of Libya’s largest oil fields, allowing production to restart. Meanwhile, China’s economy expanded more slowly than expected in the second quarter, although apparent demand for oil grew 14% last month from a year earlier.
Crude remains lower this year as China’s lackluster recovery and Federal Reserve rate hikes weigh on demand. US central bank officials are expected to raise borrowing costs again this month and have signaled they are still open to further hikes later this year.
However, oil has rallied in the past three weeks on signs the market is finally tightening, with OPEC+ heavyweights Saudi Arabia and Russia cutting crude exports. Those restrictions, along with outages in Libya and an ongoing supply disruption in Nigeria, had helped Brent briefly surpass $80 a barrel last week.
The recent surge in oil has pushed the price of Urals crude oil exported from Russia past the $60 price ceiling set by the Group of Seven to cut Moscow’s revenue. That is likely to add to banking and shipping problems for buyers including India and China, with a protection and indemnity provider already signaling Russian oil shippers can expect delays.
Prices:
- West Texas Intermediate for August delivery fell $1.27 to settle at $74.15 a barrel in New York.
- Brent for September settlement was down $1.37 at $78.50 a barrel.
