Crude oil declined on Monday by over 1% following weaker-than-expected Chinese economic data released in the early hours of the day.
The world’s second-largest economy expanded by 6.3% year-on-year in the second quarter, slower than the 7.3% predicted by experts. Suggesting a slower-than-expected post-pandemic recovery due to weakening demand at home and abroad.
“The GDP came in below expectations, so will do little to ease concerns over the Chinese economy,” said Warren Patterson, ING’s head of commodities research.
Brent crude oil, the international benchmark for Nigerian oil, fell $1.32, or 1.7%, to $78.55 a barrel by 08:42 am while the U.S. West Texas Intermediate crude oil shed $1.22, or 1.6%, to $74.20 on a second straight day of losses for both contracts.
“China data was always looked forward to with a degree of hope; well, for bulls anyway,” John Evans of oil broker PVM said in a report. “However, the contemporary economic backdrop for Asia’s driver seems to now be wheeled out for the bears.”
Outside Chinese data, the oil market faced additional pressure as production resumed at two out of three Libyan fields that were previously shut down due to a protest against the abduction of a former finance minister.
This is expected to bolster global oil supplies and further weigh on global oil prices despite Saudi Arabia and Russia’s crude oil production cuts.
The decline in price was because experts had factored in production cuts from the two key oil producers before Libya announced the restart of two of its three main oil fields.