Oil declined in a volatile session where sentiment was being driven by renewed worries surrounding China’s property sector.
(Bloomberg) — Oil declined in a volatile session where sentiment was being driven by renewed worries surrounding China’s property sector.
West Texas Intermediate fell near $82. Global markets were pressured on concerns around the debt of some Chinese developers, though there was some respite as one, Country Garden Holdings Co., is seeking to extend a maturing bond for the first time. China’s offshore yuan weakened and the dollar climbed, making commodities priced in the currency less appealing.
Crude has risen by about a quarter since its lows in June as OPEC+ linchpins Russia and Saudi Arabia curtailed supply. That’s helped push the market into a deficit of more than 2 million barrels a day this quarter, the producer group has estimated. Rising risks to flows of Russian crude through the Black Sea due to the war in Ukraine have also aided the gains.
At the same time, the outlook in the US has brightened as a growing number of economists — including the Federal Reserve’s own staff — now predict the country will escape a recession, which could buoy energy demand.
“Crude oil prices are pulling back this morning on China concerns,” said Bjarne Schieldrop, chief commodity analyst at SEB AB. “But Saudi Arabia is probably very happy with the overall situation. It has showed the oil market yet again who’s boss and the world will also need more of its oil in the coming months.”
A snapshot of conditions in China will come on Tuesday with industrial-production figures, including for the refining industry. The country, the world’s largest crude buyer, has been opening new plants, buoying import demand.
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