- Uninspiring data from China revive concerns over energy demand outlook.
- Tensions in the Middle East ease to further weigh on crude oil prices.
- Russia’s Novak says September oil output reduction totalled 200,000 barrels per day.
Crude oil prices started the week under pressure after the uninspiring data from China reminded investors of the potential negative impact of an economic slowdown in China over the global energy demand. Additionally, easing tensions in the Middle East suggested that the supply disruptions are unlikely to ramp up prices.
As of writing, the barrel of West Texas Intermediate, which touched a daily low of $54.90 earlier in the session, was trading at $55.20, erasing 1.55% on a daily basis.
Demand supply balance continues to drive crude oil prices
The data from China showed that the country’s official Purchasing Managers’ Index (PMI) for the manufacturing sector stayed below the 50 area to point out to contraction in the business activity. Additionally, the Non-Manufacturing PMI came in at 53.7 and missed the market expectation of 54.2.
On the other hand, Iran’s semi-official ILNA news agency reported that government spokesman Ali Rabiei said Saudi Arabia had sent messages to Iran’s president through the leaders of other countries. “If Saudi Arabia is really pursuing a change of behaviour, Iran welcomes that,” the spokesman said. Moreover, Ibrahim Al-Buainain, Saudi Aramco’s chief executive officer of its trading arm, during a conference announced that Aramco had restored full oil capacity following the attacks on its oil facilities earlier this month.
Meanwhile, according to the Interfax news agency, Russian Energy Minister Alexander Novak today said that Russia’s September oil output reduction totalled 200,000 barrels per day as part of the OPEC+ output deal to help crude oil prices limit their losses for the time being.
Technical levels to watch for
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