Oil down as demand woes persist, strong dollar curbs demand
Oil prices fell on Monday on the double whammy of rising demand and a rising dollar, discouraging market investors trading in more expensive U.S. dollar-pegged oil.
International benchmark Brent was trading at $95.12 a barrel as of 10:08 a.m. local time (0708 GMT), down 1.65% from the closing price of $96.72 a barrel during from the previous trading session.
The US benchmark West Texas Intermediate (WTI) was at $88.83 a barrel at the same time for a loss of 1.78% after the previous session closed at $90.44 a barrel.
Oil prices pegged to the US dollar came under pressure from the rising greenback.
The US dollar index, which measures the value of the US dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, rose 0.01% at 108.18.
As China insists on a strict zero-COVID policy that is hampering consumer demand, data showed last week that industrial production and retail sales growth was slower than expected in July with a decrease of its crude throughput.
The country slashed its mortgage rate on Monday as the world’s second-largest economy grapples with a spiraling housing crisis.
Along with bearish economic data raising concerns over investor demand, China is grappling with power cuts after “the worst heat wave and drought in six decades”.
According to the South China Morning Post, Sichuan province warned on Sunday of “particularly severe” power cuts.
Plans to resume power supply to the industrial sector in China at midnight on Sunday have been postponed until Thursday, given the forecast for rain.
Russo-Ukrainian War Deadlocked
As the Russian-Ukrainian conflict is about to enter its sixth month on Wednesday, several mediation efforts between the warring countries have so far failed, raising the prospect of supply disruptions.
However, many experts say the oil and gas sector has proven more resilient despite sanctions imposed by Western countries.
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