Oil slumps as China's Q2 GDP growth slows and Libyan production resumes
Oil prices extended their decline for a second session on Monday after China's economic data showed growth slowed in the second quarter and Libya resumed production over the weekend, raising concerns about demand from the world's second oil consumer.
Brent crude futures are down 72 cents or 0.9%, at 0333 GMT to $79.15 a barrel, and West Texas Intermediate crude (WTI) was at $74.75 a barrel, down 67 cents, or 0.9%.
China's Q2 GDP growth slowed; Crude oil production in June increased compared to May. According to data released by the National Bureau of Statistics, China's gross domestic product grew by only 0.8% in the April-June period compared to the previous quarter, and the post-pandemic recovery was hampered by weakening domestic and international demand.
GDP came in below expectations, so there isn't much China can do to alleviate concerns over its economy for now.
NBS data showed Chinese refineries processed 1.6% more daily crude in June than in May, in line with strong imports from the world's largest crude oil importer last month, stepping up operations after spring maintenance.
On the face of it, oil demand has grown strongly year over year, but the market remains concentrated on GDP figures.
Beijing will be cautious about timing any new stimulus measures and raising commodity prices. China is stockpiling crude at low prices and monitoring the recession to hit the West before continuing with all stimulus.
Prices softened last week after both benchmarks posted third consecutive gains and hit their highest level since April after production was halted at Libyan oil fields and Shell tightened supply by halting Nigerian crude exports.
Two of the three Libyan oil fields closed on Thursday, Sharara and El Feel, with a total production capacity of 370,000 barrels per day, resumed on Saturday evening.
According to sources, oil exports from western ports in Russia are projected to fall by about 100,000-200,000 barrels per day in the coming month from July.
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