Oil prices dropped in the opening hours of trading on Tuesday in anticipation of a barrage of economic data from China, which should offer hints on the prospects for any revival in demand in the top oil-importing nation on the globe.
At $82.40 per barrel, US West Texas Intermediate crude was down 11 cents, or 0.13%. At 00:15 GMT, the price of Brent crude futures fell 8 cents to $86.13 a barrel.
Tuesday will see the release of China’s industrial production, investment, retail sales, and jobless rates for July after previous data suggested the world’s second-largest economy had entered a state of deflation and seen a decline in trade.
The largest private real estate developer in China, Country Garden, is attempting to postpone payment on a private onshore bond for the first time, in the latest indication of a crippling liquidity shortage in the country’s real estate market.
Oil Prices Dropped
On Friday, the People’s Bank of China reported that new bank loans fell in July, and other important credit gauges declined. This is yet another alarming sign.
“The upside for prices this year is probably capped, especially as shut-in OPEC output is unleashed and China’s economic recovery continues to sputter. According to a note from Eurasia Group, oil prices may be approaching their ceiling, signaling the beginning of a new equilibrium.
According to a Reuters survey, China’s central bank is anticipated to hold the rates on its medium-term policy loans steady on Tuesday, despite recent indications that the economic recovery is losing steam.
The People’s Bank of China last cut the rate in June, dropping by ten basis points to 2.65%.
The Organisation of Petroleum Exporting Countries (OPEC) and its partners, OPEC+, are reducing production to increase prices. Still, weak economic growth in China is offsetting the oil supply shortage globally.
