Oil keeps dropping with concerns over US and Chinese economy
Concerns over the US economy’s strength and turbulence in China’s recovery process have a negative effect on oil prices for the fourth day in a row.
”Oil prices are still under pressure on sluggish demand outlooks as China’s economic reopening progress seems bumpy,” says CMC Markets analyst Tina Teng to Reuters.
A barrel of US West Texas Intermediate is now below USD 70, trading at USD 69.45 Monday morning compared to USD 70.98 Friday afternoon.
Negotiations continue over an agreement on a US debt ceiling after a warning from US Secretary of the Treasury Janet Yellen that the country could run out of cash on June 1 already.
The oil price has dropped by 13% this year with fears that a potential recession in the US will counter the supply cuts signaled by OPEC+, Bloomberg News reports.
Traders now await economic data from China, while numbers for April’s industrial production and retail sales land on Tuesday along with the monthly report from the International Energy Agency (IEA).
”The atmosphere in the oil market remains negative with uncertain prospects for demand and concerns over the US debt ceiling,” says Warren Patterson, head of commodities strategy at ING Groep NV, to Bloomberg.
”The market will probably look for potential revisions in the future demand in IEA’s monthly market report,” he adds.
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