Oil Falls on Expectations of Lower Demand From China

Oil prices fell more than 1% on Monday, August 16, falling for a third session, after official data showed a slowdown in refining productivity and economic activity in China, in a sign that the new outbreak of Covid-19 is denting the world’s second-largest economy.

Brent crude fell 90 cents, or 1.3 percent, to $69.69 a barrel by 06:49 GMT. US crude fell 97 cents, or 1.4 percent, to $67.47 a barrel.

The data showed the growth of factory production and retail sales in China slowed significantly in July, contrary to expectations as a new outbreak of COVID-19 and a wave of floods disrupted business activity.

Crude oil refining in China also fell last month to the lowest level on a daily basis since May 2020, as independent refineries cut production amid cutting quotas, rising inventories, and declining profits. China is the world’s largest oil importer.

In Japan, the fourth largest importer of crude oil in the world, many analysts expect modest economic growth in the current quarter, as household spending was affected by the renewal of work restrictions aimed at containing Corona injuries.