[ad_1]
Oil fell the most in more than three months as weak trade data from China and fresh doubts about whether the Federal Reserve has finished raising rates clouded the outlook for demand.
West Texas Intermediate slid 4.3% to settle near $77 a barrel, the lowest since July 21. The declines deepened in the afternoon after WTI dipped below its 200-day moving average, a sign of longer-term weakness that often spurs additional selling.
The dollar strengthened — potentially hurting oil demand by making the commodity more expensive for importers — after Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s too soon to declare victory over inflation. He also said the risk of over-tightening monetary policy is preferable to doing too little, and that he’s concerned that inflation could tick up again.
Meanwhile, trade data from China, the world’s largest crude importer, showed a precarious economic recovery as overseas shipments missed expectations, dropping 6.4%, while imports increased by 3% from a year earlier last month.
“The data signals the continued decline in the Chinese economic outlook driven by deteriorating demand in the country’s largest export destination: the West,” said Fiona Cincotta, senior financial markets analyst at City Index.
On the supply side, Russia is shipping crude near the highest rates in more than four months, and the Israel-Hamas war has yet to disrupt flows from the Middle East as it enters its second month.
Meanwhile, the prompt spread for WTI — the difference in prices between its two nearest contracts — narrowed to its weakest level since July, suggesting supplies remain ample. The premium for near-term barrels shrank to as little as 13 cents, down from $1.43 three weeks ago, when supply concerns were at the forefront of investor’s minds.
Continued supply cuts from OPEC+ leaders Saudi Arabia and Russia had supported crude prices on Monday. The two nations said over the weekend that they would continue their curbs into the end of the year. OPEC Secretary-General Haitham Al-Ghais expects oil demand to remain strong despite challenges facing the global economy.
Prices:
- WTI for December delivery declined 4.3% to settle at $77.37 a barrel in New York.
- Brent for January settlement fell 4.2% to settle at $81.61 a barrel.
[ad_2]
Source link