Oil
Brent oil prices dropped more than 1% in early trading on Monday, following the release of disappointing economic data from China. Imports and exports both dropped significantly during the month of July, providing further evidence that the world’s second-largest economy is struggling to bring growth back to pre-pandemic levels. With China’s economy stalling, traders are downgrading forecasts for global oil demand, resulting in lower prices. However, not everything is gloomy for oil bulls; Saudi Arabia announced the extension of its voluntary production cuts for another month, with Russia also reducing exports by 300 thousand barrels per day during the month of September. Against this background, oil prices dropped, as the below-expectation Chinese data dented demand prospects. However, losses were capped by supply-side tightening driven by Russia and Saudi Arabia’s output cuts.
Ricardo Evangelista – Senior Analyst
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