Key Takeaways
Brent and WTI crude prices fell due to weaker U.S. consumer demand and increased Chinese crude production.
U.S. consumer sentiment dropped to a seven-month low, impacting market confidence and oil demand.
China's crude oil production rose in May, adding to the supply pressure on global oil markets.
Brent and WTI crude prices slipped in Asian trading on Monday following a survey that revealed weaker U.S. consumer demand. Additionally, an increase in May crude production in China, the world's biggest crude importer, contributed to the downward pressure on prices.
Global benchmark Brent crude futures for August delivery fell by 0.4% to $82.33 per barrel at 0330 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures for July delivery dropped by 0.4% to $78.16 a barrel. The more-active August delivery WTI contract also declined by 0.4% to $77.76 per barrel.
These declines came after prices had already slipped on Friday when U.S. consumer sentiment was reported to have fallen to a seven-month low in June. Households expressed concerns about their personal finances and inflation. Despite this, both benchmark contracts recorded nearly 4% gains last week, marking the highest weekly rise in percentage terms since April, driven by signs of stronger fuel demand.
"Last week's robust rally was fueled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC's vested interest in crude oil, there is some skepticism around OPEC’s forecasts," said Tony Sycamore, a market analyst at IG in Singapore. "Friday's soft U.S. consumer confidence numbers suggest that the resilience of the American consumer and the U.S. economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures," he added.
China's May domestic crude oil production rose by 0.6% year-on-year to 18.15 million tonnes, according to data from the National Bureau of Statistics. Year-to-date output reached 89.1 million tonnes, up 1.8% from the previous year. However, national crude oil throughput fell by 1.8% in May compared to the same period last year, totaling 60.52 million tonnes, with year-to-date throughput increasing by 0.3% to 301.77 million tonnes.
The flurry of data on Monday underscored a bumpy recovery for the world's second-largest economy, with industrial output lagging expectations and the property sector showing no signs of easing.
On the geopolitical front, concerns of a wider Middle East conflict lingered after the Israeli military reported intensified cross-border fire from Lebanon's Hezbollah movement. Sunday saw a reduction in Hezbollah fire, while the Israeli military conducted several airstrikes against the group in southern Lebanon.
Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.
Comentários