Oil turned lower as markets globally struck a risk-off tone after weaker-than-expected data from China and fresh concern about the health of the US banking system.
(Bloomberg) — Oil turned lower as markets globally struck a risk-off tone after weaker-than-expected data from China and fresh concern about the health of the US banking system.
West Texas Intermediate fell to trade near $80 a barrel. China’s trade plunged in July as slowing global demand clouded the outlook for exports, while the nation’s oil imports slipped to a six-month low. The dollar climbed and stocks fell as a ratings downgrade for 10 small and midsized US lenders also exacerbated worries of renewed banking tumult.
Oil rallied to the highest level since April early in Monday’s trading, but pessimism around the global economic outlook has stalled that rally. Crude’s big three monthly reports — those from the International Energy Agency, OPEC, and the Energy Information Administration — will offer further updates on the health of the market over the rest of this week.
Read More: China’s Oil Imports Slip to Six-Month Low on Sluggish Recovery
“Trade data this morning makes for poor reading,” said John Evans, an analyst at brokerage PVM Oil Associates. “It still appears as if we are unable to escape the flux that China’s industrial complex finds itself in.”
Away from headline prices, Brent crude has weakened markedly versus other oil benchmarks in recent days. It is now trading at a rare discount to Middle Eastern Dubai crude, as OPEC+ output cuts lift the cost of heavier supplies, wihle its premium to WTI has also contracted to the smallest since May.
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