Oil prices plummeted to the lowest level in months on Monday morning after worse-than-expected data from China showed its economy unexpectedly slowed last month.
Oil prices plummeted to the lowest level in months on Monday morning after worse-than-expected data from China showed its economy unexpectedly slowed last month—fueling concerns that weaker market conditions could temper oil demand and potentially spark a global recession this year....
The plunge came after overnight data from China showed the nation's economy slowed in July amid ongoing Covid, property market uncertainty and global recession fears—prompting a surprise interest rate cut from the People's Bank of China to help bolster consumer demand. "It seems the reopening boost was both uninspiring and short-lived," Oanda analyst Craig Erlam said in emailed comments Monday, blaming the"very disappointing" data for the morning sell-off in commodity markets and saying the figures are a concern for oil demand—especially as China remains committed to its zero-Covid policy.
With Covid cases continuing to rise in China, Erlam expects the downward pressure on oil prices could intensify in the coming weeks, but many expertsAfter reporting a record $48.4 billion profit for the second quarter, oil giant Saudi Aramco said in its earnings this weekend that it expects oil demand will continue to grow for the rest of the decade—despite the downward economic pressures on short-term global forecasts.Surging energy prices pushed U.S. inflation to its highest level in 40 years, but global recession fears have since helped oil pricesfrom 14-year highs. The price of Brent crude has fallen more than 27% since its high in March. Nevertheless, prices are still up nearly 20% this year.
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