Connect with us

Trending News

Oil sinks to six-month low amid weak data, slump in gasoline



© Reuters. A customer holds a nozzle to fill up his tank in a gasoline station in Nice

By Barani Krishnan

NEW YORK (Reuters) – Oil sank to six-month lows on Monday with falling below $50 a barrel on sluggish U.S. and Chinese economic data and bets for weaker gasoline consumption in the United States after tearaway demand earlier in the summer.

Evidence of growing global oversupply and a stock market collapse in China, the world's largest energy consumer, have weighed on oil for weeks, leading in July to futures' largest monthly decline since the 2008 financial crisis.

With August trading in its first session, the rout accelerated as gasoline prices fell more than that of crude.

Supply worries aside, traders pinned the latest losses on sluggish U.S. and Chinese data.

U.S. consumer spending advanced at its slowest pace in four months in June as demand for automobiles softened. Growth in Chinese manufacturing activity, meanwhile, unexpectedly stalled in July as demand at home and abroad weakened.

“Economic weakness has set the tone,” said Matt Smith, director of commodity research at Clipperdata, a New York-based energy database.

“But the gasoline crack spread is also unraveling,” Smith said, referring to the difference between gasoline and U.S. crude prices, which sets the profit margin for refiners.

Brent , the global benchmark for crude, was down $2.30, or 4.4 percent, at $49.91 a barrel by 12:20 p.m. EDT (1620 GMT). Brent's session bottom of $49.81 was the lowest since Jan. 30.

U.S. crude was down $1.61, or 2.4 percent, $45.97.

“The chart is looking anything but constructive,” said Fawad Razaqzada, technical analyst in London for, who expects U.S. crude to test its March low of $42.03 and Brent its January bottom of $45.19.

Gasoline was down 5 percent, narrowing its crack, or spread, with U.S. crude to below $26, the lowest in more than a week.

A Reuters survey last week showed oil output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July.

The survey showed Saudi Arabia and other key OPEC members keen to defend market over crude prices, which are down 12 percent this year, after last year's 48 percent tumble.

Hedge funds and other speculators have cut their bullish exposure to U.S. crude to a near 5-year low, trade data showed on Friday, as local drillers added rigs and pumped at full throttle despite the global oil glut. [RIG/U]

Large investors in Brent also cut their holdings last week by the most in percentage terms since September 2014. [O/ICE]

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Continue Reading

Copyright © 2023 The Capitalist. his copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only. MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements.


Is THE newsletter for…


Stay up-to-date with the latest kick-ass interviews, podcasts, and more as we cover a wide range of topics, in the world of finance and technology. Don't miss out on our exclusive content featuring expert opinions and market insights delivered to your inbox 100% FREE!