Investing.com – Crude prices tumbled nearly 2% Tuesday as worsening economic data out of top oil importer China offset some of the market’s ebullience over Saudi production cuts.
China’s industrial output and retail sales data on Tuesday showed the economy slowed further last month, intensifying pressure on already faltering growth and prompting authorities to cut key policy rates to bolster economic activity.
The latest Chinese data adds to what has already been a woeful July for the world’s number two economy. Bank loans slid to a 14-year low last month; consumer and producer prices declined and exports slid their most since February 2020. The stumbling Chinese economy and lack of any effective stimulus measures have pressured the yuan against the , which has rallied since the start of this week, adding to the weight of commodities, particularly oil.
“Crude prices continue to pull back after disappointing Chinese industrial production data,” said Ed Moya, analyst at online trading platform OANDA, who also cited a German survey that showed heightened concerns about growth in Europe’s leading economy.
“The oil market might remain tight, but most of the headlines are turning bearish for the demand side,” added Moya. “Oil’s pullback might need to continue a while longer before buyers emerge.”
In Tuesday’s trade, New York-traded West Texas Intermediate, or , crude settled down $1.52, or 1.8%, at $80.99 a barrel, clinging to the $80 per barrel support. In the prior session, WTI lost 0.8%, bringing its week-to-date drop to 2.6%.
That was a breakaway from a previous seven-week rally inspired by optimism over Saudi production cuts that left the U.S. crude benchmark up 20% in all, with a 9-month high at $84.89.
London-based crude settled down $1.32, or 1.5%, at $84.89, adding to Monday’s 0.7% decline. Week-to-date, Brent was down 2.2% after a seven-week rally that gave oil bulls an 18% return and a seven-month high of $88.10.
Market participants were also on the lookout Tuesday for U.S. weekly oil inventory data, due after market settlement from the API, or the American Petroleum Institute.
The API will release at approximately 16:30 ET (21:30 GMT) a snapshot of closing balances on U.S. crude, gasoline and distillates for the week ended Aug 11. The numbers serve as a precursor to official inventory data on the same due from the U.S. Energy Information Administration on Wednesday.
For last week, analysts tracked by Investing.com expect the EIA to report a drop of 2.050 million barrels, versus the 5.851M barrel rise reported during the week to Aug 4.
On the front, the consensus is for a draw of 1.6M barrels on top of the 2.661M-barrel decline in the previous week. Automotive fuel gasoline is the No. 1 U.S. fuel product.
With , the expectation is for a drop of 0.4M barrels versus the prior week’s deficit of 1.706M. Distillates are refined into , diesel for trucks, buses, trains and ships and fuel for jets.
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