Crude Oil Lower; Global Growth Worries Weigh by

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By Peter Nurse — Monday’s drop in oil prices was caused by concerns about the growth prospects for Europe and China. This raised concerns about the global demand picture.

Futures traded 0.2% lower at $84.86/barrel by 09:25 ET (13.25 GMT), while contract prices fell 0.2% to $91.17

China released its third-quarter numbers earlier Monday, following last week’s failure to appear as scheduled. The number rose 3.9% in July-September quarter year on year, rebounding at a faster pace than expected, given the 3.5% consensus figure.

However, this was still clearly below the Communist Party’s own 5.5% target, a testament to the economic difficulties faced by the country, not least because of its Covid-zero policy, but also, increasingly, the slowdown in its key export markets in North America and Europe. 

This was illustrated by China’s crude oil imports in September coming in 2% below their level a year earlier, as demand in the world’s largest importer remained subdued last month.

The European economic situation looks worse after the release of purchasing managers indices for and. These indicate that GDP is on track to contract in the fourth-quarter.

The Eurozone flash PMI fell below 47.1 in December 2020. The comparable U.K figure was 47.2. This is because of the increased supply chain problems and inflation that were exacerbated by a political crisis.

Despite these economic woes, both the and the are expected to increase interest rates at their next meeting, on Thursday in the ECB’s case, likely hurting growth even more.

The supply side is where the Organization of Petroleum Exporting Countries (or OPEC+) will meet again in December. This is after the group announced that it would reduce production by 2,000,000 barrels per day.

According to analysts at Goldman Sachs in a note, the Biden administration’s plan of continuing to release oil from its strategic reserve is unlikely to have any significant impact on current crude prices.

“We believe that incremental SPR sales are the most likely action (16 mb is available starting FY2023 Congressionally required sales), but this remains price dependent… Such a release will likely have a limited influence (

According to data from U.S. energy companies, oil and rigs were added last week by American energy firms for the second consecutive week, according Friday’s release by energy services firm.

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