Factories in the U.S., Europe and Asia struggled to gain momentum in July as weak global demand and China’s strict COVID-19 restrictions slowed production, surveys showed on Monday.
“These figures do not alleviate recession fears,” said Tamas Varga of oil broker PVM.
Brent crude was down $1.40, or 1.4%, at $98.63 a barrel by 0817 GMT, while U.S. West Texas Intermediate was down $1.00, or 1.1%, at $92.89.
Oil prices surged in early 2022, with Brent near an all-time high of $147 a barrel in March after Russia’s invasion of Ukraine fueled supply concerns. Fears of slowing growth have since outweighed tight supply.
“The upward momentum in oil prices has gradually faded,” said analysts at Haitong Futures. “Once the supply and demand situation shows signs of further deterioration, oil is likely to lead the decline among commodities.”
This week’s focus will be on Wednesday’s meeting between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, to decide whether to increase output in September.
Two of the eight OPEC+ sources told Reuters a modest output increase in September would be discussed, while others said producers were likely to keep output steady.
The latest weekly reading of U.S. inventories will also be on our radar. Analysts expect crude oil and gasoline inventories to fall. The American Petroleum Institute will release its first report this week in 2030 GMT. [EIA/S]