Oil sheds more than $1 as China data disappoints
Oil prices dropped for a second session on Monday as weak China economic data triggered concerns about demand at the world's largest crude importer while the head of the world's top exporter, Saudi Aramco, said it was ready to ramp up output.
Brent crude futures fell $1.14, or 1.2%, to $97.01 a barrel by 0631 GMT after settling 1.5% lower on Friday. West Texas Intermediate (WTI) crude was at $91.03 a barrel, down $1.06, or 1.2%, after a 2.4% drop in the previous session.
China's economy unexpectedly slowed in July, while refinery output slipped to 12.53 million barrels per day, its lowest since March 2020, government data showed.
The official data indicates that oil demand is weakening as domestic logistics and consumer demand are dropped due to the record-high oil pump prices.
Oil demand could stay on the downtrend for the rest of the year as the threat of COVID-19 restrictions encourages precautionary savings and reduces oil consumption, he added.
Saudi Aramco declared that it stands ready to raise crude oil output to its maximum capacity of 12 million bpd if requested to do so by the Saudi Arabian government. Added that China's easing of COVID-19 restrictions and a pickup in the aviation industry could add to demand.
Oil prices rebounded more than 3% last week after a damaged oil pipeline component disrupted output at several offshore Gulf of Mexico platforms and as investors pared back expectations for interest rate increases in the United States.
Producers had moved to reactivate some of the halted production after repairs were completed late Friday, a Louisiana official said.
Baker Hughes Co reported on Friday that the U.S. oil rig count rose by 3 to 601 last week. The rig count, an early indicator of future output, has been slow to grow with oil production after seeing the recovery of pandemic-related cuts would happen no earlier than next year.
Global oil markets remained supported by tight supplies in the run-up to EU sanctions on Russian crude oil and refined product supplies this winter.
By the way, more supplies could come if Iran and the United States accept an offer from the European Union to revive the 2015 nuclear deal, which would lift sanctions on Iranian oil exports.
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