Oil gives back earlier gains and banks cut growth forecasts in China

Global oil prices fell on Monday, reversing gains made last week, as doubts about China’s economy overshadowed OPEC+ production cuts and the reduction in the number of oil and gas rigs operating in the United States for the seventh consecutive week.

Brent crude fell 68 cents to trade at $75.93 a barrel by 0042 GMT, while US West Texas Intermediate crude fell 59 cents to $71.19.

Last week, Brent rose 2.4 percent and WTI rose 2.3 percent.

A number of major banks cut their forecasts for China’s 2023 GDP growth, after May data released last week showed that the post-COVID recovery in the world’s second-largest economy was facing bumps.

Sources told Reuters that China will offer more stimulus support to its slowing economy this year, but concerns about debt and capital flight will keep measures aimed at supporting weak demand in the consumer and private sectors.

However, refinery consumption in China rose in May to the second highest level on record, helping to extend last week’s gains. US energy companies reduced the number of operating oil and natural gas rigs for the seventh week in a row for the first time since July 2020.

The number of oil and gas rigs, an early indicator of future production, fell by 8 to 687 in the week ending June 16, the lowest level since April 2022.