Oil prices slumped on Monday with concerns over a rise in oil production of OPEC+ producers and economic data showed growth in factory activity in China, the world’s second-largest oil consumer, fell sharply.
OPEC July oil production hit a 15-month high, and Chinese July factory activity was growen at its slowest pace since February 2020. China has been leading economic recovery in Asia and concerns would grow that the global outlook could see a significant decline if the pullback deepens.
Brent crude futures fell 76 cents, or 1%, to $74.65 as of 0455 GMT, while West Texas Intermediate (WTI) crude futures fell 69 cents, or 0.9%, to $73.26.
The crude oil demand outlook is on shaky ground and this will likely not be settled until global vaccine applications improve.
It showed production hit its highest level since April 2020 in July, as the Organization of the Petroleum Exporting Countries (OPEC) further eased production cuts under an agreement with its allies. Saudi Arabia phased out the voluntary supply cut.
As coronavirus cases continue to climb globally, analysts said higher vaccination rates will limit the need for harsh quarantines that depleted demand during the peak of the pandemic last year.
The US has said it will not isolate again to curb COVID-19 despite the coronavirus rise, but the Delta variant, which mostly affects unvaccinated people, could cause troublesome times.
India’s daily gasoline consumption surpassed pre-pandemic levels last month as states eased their COVID-19 lockdowns. However, lower gasoline sales figures in July indicated a decline in industrial activity.
The United States and Britain reported on Sunday that they are working together to respond to an attack by Iran on an Israeli-operated oil product tanker off the coast of Oman on Thursday that killed a British and a Romanian personnel.
