Oil fell for a third day as a hastening downturn in the euro area added to wider worries about economic growth in top importer China.
(Bloomberg) — Oil fell for a third day as a hastening downturn in the euro area added to wider worries about economic growth in top importer China.
West Texas Intermediate futures for October fell toward $79 a barrel. The contraction in euro-area private sector activity intensified in August, while manufacturing remained in decline. China’s stuttering economy also continues to threaten demand for global commodities.
The industry-funded American Petroleum Institute said US crude stockpiles fell 2.4 million barrels last week, a bullish signal if confirmed by official Energy Information Administration data due later Wednesday.
Crude’s rally since late June has faltered over the last couple of sessions amid the worsening outlook in China and signs the Federal Reserve isn’t yet done with its campaign of monetary tightening. That’s overshadowed a tightening market following supply cuts by OPEC+ kingpins Saudi Arabia and Russia.
“Growing expectations that the US Fed still has more to do with its tightening cycle, along with broader strength in the US dollar, has left the oil market facing some strong headwinds,” said Warren Patterson, head of commodities strategy at ING Groep NV. “However, given that fundamentals remain constructive, we believe any price weakness will be relatively short-lived.”
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