Oil prices went down a little bit on Tuesday as investors looked at data that showed a slowdown in manufacturing around the world. This happened at the same time as a meeting of major crude producers to decide whether to increase supply.
At 06:34 GMT, Brent crude futures fell 24 cents, or 0.2%, to $99.82 per barrel, while WTI crude futures fell 10 cents, or 0.1%, to $93.78 per barrel. Brent futures fell on Monday to a session low of $99.09 per barrel, which was the lowest price since July 15. The price of US crude fell as low as $92.42 per barrel, which was the lowest since July 14.
“Crude prices fell after a lot of factory activity data showed that the world is headed for a huge global economic contraction,” said Edward Moya, senior market analyst from Oanda, in a note. “People also expect more oil production after oil companies had a very good earnings season,” he added.
Monday, worries about a recession grew as surveys from the US, Europe, and Asia showed that factories had a hard time getting going in July. Production slowed down because global demand was falling and China had strict rules about Covid-19.
People in the market are also waiting to see what comes out of a meeting between the Organization of the Petroleum Exporting Countries (Opec) and its allies, such as Russia, on Wednesday to decide on September output. This group is known as Opec+.
Two of the eight Opec+ sources surveyed by Reuters said that the meeting on August 3 would talk about a small increase for September. The rest said that output is probably going to stay the same. A reporter for Fox Business News said that Saudi Arabia will try to get Opec+ to make more oil at the meeting.
“Oil prices aren’t going up as fast as they used to… Analysts from Haitong Futures said that oil is likely to be the first commodity to go down once there are signs that the supply and demand situation will get worse.
Also, the US put sanctions on Chinese and other firms on Monday, saying they helped sell tens of millions of dollars worth of Iranian oil and petrochemicals to East Asia. This is part of an effort to put more pressure on Tehran to stop its nuclear program.
The market is also being hurt by the fact that US House Speaker Nancy Pelosi might go to Taiwan, even though Beijing has warned her not to. The visit would be the first time in more than 25 years that a high-level US official went to the island. This could make things worse between the US and China.
Mahnur is MS(development Studies)Student at NUST University, completed BS Hons in Eng Literature. Content Writer, Policy analyst, Climate Change specialist, Teacher, HR Recruiter.
