Oil prices went down after China posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world’s largest crude oil importer.
Brent crude futures (LCOc1) for September fell 21 cents to $66.51 a barrel by 0222 GMT while U.S. crude (CLc1) for August was down 28 cents at $59.93 a barrel. Both contracts last week posted their biggest weekly gains in three weeks on cuts in U.S. oil production and diplomatic tensions in the Middle East.
Refineries in the path of Tropical Storm Barry continued to operate despite flood threats while the storm has slashed U.S. Gulf of Mexico crude output by 73%, or 1.38 million barrels per day.
An unwinding of the risk premium from tropical storm Barry, lower oil demand forecasts and a lack of news from the Middle East may have led to a muted oil price reaction, Stephen Innes, managing partner at Bangkok-based Vanguard Markets, said.
China’s economic growth slowed to 6.2% in the second quarter from a year earlier, in line with analysts’ expectations, with demand at home and abroad faltering as the Sino-U.S. trade war bites.
Still, China’s industrial output and retail sales beat forecasts, “suggesting that the economy in China is healthier than we previously been pricing,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
In the Middle East, Iranian President Hassan Rouhani said in a televised speech on Sunday that Iran is ready to hold talks with the United States if Washington lifts sanctions and returns to the 2015 nuclear deal it quit last year.
Meanwhile Britain has offered to facilitate the release of the detained Iranian oil tanker Grace 1 if Tehran gave guarantees that it would not go to Syria.