Oil slips nearly 3% on Chinese virus brakes and strong dollar

  • WTI crude at its lowest since May
  • China Reports Increase in New COVID-19 Cases
  • Wall Street Banks Cut China’s Growth Forecast Amid COVID Concerns
  • China’s crude imports in July drop 20% year on year
  • UN panel issues dreadful climate change warning

NEW YORK, Aug. 9 (Reuters) – Oil prices fell about 3% on Monday, extending last week’s steep losses due to the rising US dollar and fears that further coronavirus restrictions in Asia, especially in China, does slow the global recovery in fuel demand.

The disastrous warning from a UN panel on climate change added to the grim mood after fires in Greece razed homes and forests and parts of Europe suffered flooding deadly last month.

Brent futures fell $ 1.84, or 2.6%, to $ 68.86 a barrel at 11:22 a.m. EDT (1522 GMT), while U.S. West Texas Intermediate (WTI) crude fell by $ 1.88, or 2.8%, to $ 66.40.

This has caused both benchmarks to fall by around 10% over the past 10 sessions.

WTI traded at its intraday low since May and was on track for its lowest close since May 28. Brent, meanwhile, was on track for its lowest close since July 19.

“Oil prices are under tremendous pressure … concerns about COVID once again being at the forefront,” said Craig Erlam, senior analyst at OANDA, noting that “the increase in cases and restrictions in the Chinese delta has questioned the short-term economy. Wall Street banks Goldman Sachs (GS.N), JPMorgan (JPM.N) and Morgan Stanley (MS.N) all lowered their growth forecasts for China on Monday, after a unexpected slowdown in export growth and fears that the coronavirus resurgence could dampen economic activity.

China reported 125 new cases of COVID-19 on Monday, up from 96 a day earlier. In Malaysia and Thailand, infections are reaching daily highs. Read more

China’s export growth slowed more than expected in July after outbreaks of COVID-19 cases and flooding, while import growth was also weaker than expected. Read more

China’s crude oil imports fell in July and fell sharply from record levels in June 2020. read more

A rally in the US dollar (.DXY) to a near three-week high against a basket of other currencies also weighed on oil prices after the stronger-than-expected US jobs report of Friday prompted a bet that the Federal Reserve could act faster to tighten US monetary policy. Politics. Read more

A stronger US dollar makes oil more expensive for holders of other currencies. Read more

The market focused on a number of US Federal Reserve policymakers due to speak on Monday and US inflation data due Wednesday, which will be watched for further clues as to when the Fed may start. to decrease.

Saudi Arabia, meanwhile, posted a deficit of 4.6 billion riyals ($ 1.23 billion) in the second quarter, a significant drop from the 109.2 billion riyals reported in the same quarter last year. is one year old. Read more

Saudi Aramco (2222.SE) on Sunday reported a nearly four-fold increase in second-quarter net profit on Sunday and said it was looking for other potential deals to offer investors and unlock capital after the oil giant in June struck a $ 12.4 billion deal. for its crude pipeline system. Read more

Additional reporting by Dmitry Zhdannikov in London and Sonali Paul in Melbourne; Editing by Marguerita Choy and Jane Merriman

Our standards: Thomson Reuters Trust Principles.


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