Mubasher: Oil prices dropped on Wednesday on disappointing economic figures from China and a build-up in the US crude stockpiles, Reuters reported.
This came as a reversal to some of the gains recorded in the preceding session after the US announced that it would postpone tariffs on some Chinese imports, signalling a thaw in the trade tensions between the world’s two biggest oil consumers.
By 9:38 am GMT, US Nymex crude futures dropped by 1.16% to $56.44 per barrel (pb), after climbing by 4% on Tuesday, the biggest single-session gain recorded in more than a month, while global benchmark Brent futures fell by 0.65% to $60.90 pb, having surged by 4.7% in the previous session, the largest percentage gain since last December.
China on Wednesday posted a slew of softer-than-expected economic figures for July, among which was a report of a sharp downturn in industrial production growth to a more than 17-year low.
“Deteriorating China industrial output and consumer spending suggest the fundamental picture isn’t great and the demand for energy may be under the pressure,” CMC Markets analyst Margaret Yang was quoted by Reuters.
Moreover, data from industry group the American Petroleum Institute (API) showed a surprise rise in the US oil stockpiles last week.
Oil inventories climbed by 3.6 million barrels to 433 million, versus a decline of 2.8 million barrels expected by analysts polled by Reuters.
Traders also booked profit after Tuesday’s surges, another bearish factor to the commodity, analysts told the news agency.