The domestic market for crude oil saw a negative reaction to a decrease in demand that was ascribed to stronger US currency and ongoing market worries about China’s sluggish economy. Prior to a pessimistic attitude setting in last week, the market was met by a rise in demand. Qua Iboe and Nigeria’s river basin nevertheless finished higher at $91.24, per market statistics.
Benchmark Brent crude for international markets traded at $85.75 per barrel, down 1.22% from Friday’s closing price of $86.81 per barrel. West Texas Intermediate (WTI), the American benchmark, was trading at the same time at $82.17 per barrel, down 1.22% from Friday’s session finish of $83.19 per barrel.
Despite hefty losses at the beginning of the week, both benchmarks were still at multi-month highs. The world’s largest crude oil importer, China, as well as emerging pessimistic statistics from that nation were significant factors pushing the price drops.
The US dollar index rose 0.10% to 102.79, the highest level in the previous 30 days, measuring the value of the US dollar against a basket of currencies that includes the British pound, Canadian dollar, Swedish krona, and Swiss franc.
The fragile nature of China’s economic recovery is reflected in the country’s lackluster industrial data, which investors are currently placing bets on. During the first seven months of 2018, the leading worldwide importer of crude oil, iron, steel, copper, and coal showed decreases in these imports.
The biggest user of oil in the world, the US, has higher-than-expected annual consumer inflation, which pushes up interest rate expectations and fuels fears about inflation. This keeps oil prices in check.
Experts assert that the July producer inflation data, which showed that the US Federal Reserve (Fed) has not yet achieved victory in its battle against inflation, also prepared the Fed to decide to raise interest rates again.
The formal remarks and minutes from the Federal Open Market Committee meeting held on June 13–14 are currently being eagerly awaited by investors and will be made available on Wednesday.
