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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Oil Prices Dip As China’s Economic Growth Disappoints

  • Oil prices were trading lower early on Monday morning, with WTI dropping to $74.68 and Brent falling toward $79.
  • The resumption of production at Libyan oilfields over the weekend added downward pressure to oil prices.
  • Underwhelming GDP data out of China also weighed on the oil market, with the country’s second-quarter economic growth disappointing.

Oil prices fell by around 1% in early Asian trade on Monday after major Libyan oilfields resumed production over the weekend following a brief shutdown and after China reported second-quarter economic growth below expectations.  

In the morning in Europe, the U.S. benchmark WTI Crude was trading down by 0.98% at $74.68 per barrel, while the international benchmark, Brent Crude, traded below the $80 per barrel mark it had reached last week for the first time since May. Brent was down by 0.96%, at $79.10.

Underwhelming Chinese GDP data weighed on the oil market, again, after the world’s second-largest economy and top crude oil importer reported early on Monday 6.3% GDP growth for the second quarter, missing expectations of 7.3% growth and slowing quarter-on-quarter. GDP in the second quarter rose by just 0.8% compared to the first quarter, after 2.2% quarterly growth in the first quarter.

The economic growth miss from China added to the return to production of large Libyan oilfields to weigh on oil prices on Monday.

Last Friday, Libya’s largest oilfield, Sharara, was fully halted amid protests on Friday as tensions in the restive African OPEC producer returned. The El Feel oilfield close to Sharara was also affected and was also stopped. Combined, the Sharara and El Feel oilfields in southwestern Libya pumped around 350,000 bpd of crude oil before the stoppage. 

The halting of production at the fields was the result of protests by the Al-Zawi tribe over the kidnapping of Faraj Bumatari, a former finance minister.

Bumatari has been released, tribal leader Al-Senussi Al-ahlaiq told Reuters, which led to the resumption of production at Sharara and El Feel.

Libya lost 340,000 barrels in production due to the closures, Oil Minister Mohamed Aoun told Dubai-based Asharq TV this weekend.

The oil ministry warned that Libya would lose market share due to the on-and-off supply.

“The loss of confidence in the continuity of Libyan oil supply to the global market will result in a loss of market share for Libyan oil and decreased demand for it,” the ministry said in a statement carried by Reuters.  

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By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mike Lewicki on July 17 2023 said:
    Yes it's so disappointing that their economy only grew by what it did.

    Anything to try to swing the mood to bearishness.


  • Carlos Blanco on July 17 2023 said:
    This is what happened to an overmanipulated economy. China should know what would happen to a credit-based economy. The massive debt will make it hard to find sustainable growth avenues.

    And CCP should worry about the high youth unemployment rate. These people do not have a proper avenue to express their anger like in democratic countries i.e general election. This could be a ticking bomb for the country.
  • Mamdouh Salameh on July 17 2023 said:
    Both the International Monetary Fund (IMF) projected early in 2023 that China’s economy will grow at 5.2%-6.5% this year. China expected its economy to grow within this rage. So the claim by the author that China missed its growth rate of 7.3% in the second quarter of this year is absolutely wrong and is a blatant attempt to shift the blame for the drop in prices today from the US banking difficulties to China.

    A growth of 6.3% by China in the second quarter is more than five times the growth rate of the US economy and eight time the EU’s and is the envy of both of them
    .
    Moreover, China’s economy is the world’s largest based on purchasing power parity (PPP). It is 25% bigger than the US economy which is also based on PPP.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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