Oil price plunges below $100 on China demand fears

A barrel of US West Texas Intermediate (WTI) fell 5% to $93.69 a barrel (REUTERS/Lucy Nicholson/file)
A barrel of US West Texas Intermediate (WTI) fell 5% to $93.69 a barrel (REUTERS/Lucy Nicholson/file)

Stock markets diverged on Monday as investors followed a series of corporate earnings reports, while the oil prices have plunged on concerns about Chinese demand.

European stock exchanges closed without clear trendafter a month of July marked by economic indicators and corporate results.

The bag of Paris ended up losing 0.18%, while London fell 0.13% and frankfurt 0.03%, virtually unchanged.

Milano it gained 0.11% while in Madrid the Ibex-35 closed losing 0.87%.

Wall Street rose in the afternoon after opening lower the first day of August after a good month of July.

The price of WTI crude fell 5% on Monday and Brent fell below $100 days after the OPEC+ producing cartel meetingfor the concern about oil demand in China.

Around 1:10 p.m. GMT, the barrel of West Texas Intermediate (WTI) American fell 5% to $93.69 a barrel and the marker North Sea Brentwhich is the reference in Europe, crossed the $100 marktrading at $99.99, after losses of 3.83%.

Analysts consulted as part of a survey of Reuters lowered their forecast for average Brent prices in 2022 to $105.75 a barrel for the first time since April. Its estimate for WTI fell to $101.28.

The purchasing managers index (PMI, benchmark indicator for the sector) compiled by the British economic information company IHS Markit it fell from 51.7 points in June to 50.4 in Julybelow the 52 whole numbers that analysts predicted, according to figures released today.

A slowdown in the Chinese economywho has been constrained by covid restrictions, It makes investors fear a drop in energy demand from the world’s largest consumer.

Investors are also concerned about the slowdown in Japanese manufacturing activity, which grew in July at its weakest pace in 10 months, according to data released on Monday.

The market is also waiting for the meeting of those responsible for the Organization of Petroleum Exporting Countries (OPEC) and its partners this Wednesday by videoconference, in which they will discuss September production.

Two of eight OPEC+ sources who participated in an investigation into Reuters They said that at the August 3 meeting a modest increase for September would be discussed. The rest said production should remain stable.

The group’s new general secretary, Haitham al-Ghais, reiterated on Sunday that Russia’s membership in OPEC+ is key to the deal’s successreports the Kuwaiti daily Alrai.

The increase in Libyan oil production has also influenced priceswhich reached 1.2 million barrels per day (bpd), against 800,000 bpd on July 22, after the lifting of the blockade of several oil installations.

(With information from AFP, EFE and Reuters)

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