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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 Extend Losses On Weak Economic Data From China

  • Oil prices continued to fall early on Wednesday morning, with WTI trading at $67.48 and Brent falling to $71.61.
  • Oil prices fell by 4% on Tuesday after manufacturing data from China disappointed and the U.S. dollar strengthened.
  • Oil markets are on edge ahead of the OPEC+ meeting this Sunday, with lower prices having the potential to raise tensions.
Oil Prices

Oil prices slumped by another 3% early on Wednesday, extending the 4% losses from Tuesday after manufacturing data from China disappointed and the U.S. dollar strengthened.

As of 7:27 a.m. EDT on Wednesday, the U.S. benchmark, WTI Crude, had plunged below $68 per barrel, at $67.48, down by 2.89%. WTI crude oil futures sank below $70 a barrel on Tuesday amid concerns about opposition to the U.S debt ceiling deal.

The international benchmark, Brent Crude, was down by 2.64% early on Wednesday at $71.61.

WTI and Brent were on track to post a seventh month of monthly declines of more than 9% and 11%, respectively.

While the debt limit deal late on Tuesday cleared its first hurdle at the Rules Committee, which considered the terms by which the legislation would be debated and voted on by the full House, fresh macroeconomic data out of China early on Wednesday weighed on market sentiment again.

China’s purchasing managers’ index (PMI) dropped in May to a five-month

low of 48.8, pointing to a sharper-than-expected contraction in factory activity. Manufacturing activity was below estimates for a second consecutive month, raising again concerns about oil demand in the world’s top crude importer.  

Market participants are also on edge ahead of a key OPEC+ meeting this weekend, at which the top producers of the alliance, Saudi Arabia and Russia, are heading with contrasting views on output policy.

“Lower prices ahead of the OPEC+ weekend meeting may raise the temperature in the room with Russia continuing to pump while key Middle East producers have shown constraint,” Saxo Bank’s analysts said on Wednesday.

“The front month spreads of Brent and WTI both trades in contango, a sign of ample supply.” 

ING strategists Warren Patterson and Ewa Manthey said on Wednesday, “Market reports of divergent views from Russia and Saudi Arabia on oil supply requirements weighed on the sentiment yesterday as the probability of the OPEC+ meeting concluding without any production cut increases rose.”

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By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on May 31 2023 said:
    Shifting the blame for recent oil price losses on alleged disappointed manufacturing data from China is self-delusional and futile particularly when the Chinese economy is projected to grow in 2023 by 5.2%-6.5 compared with 1.6% for the United States’.

    The one and only one reason for the decline of oil prices over the last two months is persistent fears of a global banking or financial crisis triggered by a shaky US banking system and also fears of default by the United States over lack of agreement between the Biden administration and Congress in lifting US borrowing ceiling.

    The strengthening of the US dollar is merely a side show.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • George Doolittle on May 31 2023 said:
    Retail prices across the entire US excepting Ohio and Houston however remain at *NOSE BLEED* levels

    Long $evgo strong buy

Leave a comment




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