Brent Crude falls on anticipation of China’s industrial production report – Investors King

Brent crude oil prices fell on Monday, reversing some of last week’s gains as traders eagerly awaited the release of key economic data from China, the world’s biggest crude importer.

After climbing 3.8 percent last week — the first weekly gain in four — Brent crude fell to $82 a barrel. Similarly, West Texas Intermediate (WTI) crude was trading near $78 a barrel.

Market attention is now focused on China’s scheduled release of industrial production and crude oil refining figures for May, which are expected to provide crucial insights into the country’s economic health and energy demand.

China’s oil refining — known as crude oil production — is expected to be flat or even fall this year for the first time in two decades, barring a drop in 2022 due to the COVID-19 pandemic. This projection is based on a Bloomberg survey of market analysts.

In 2023, China processed a record volume of crude as demand rebounded, but signs of robust supply and lingering concerns about Chinese demand have kept oil prices lower since early April.

The situation was further complicated by OPEC+’s recent decision to increase production this year, which initially unsettled the market. Key members of the cartel have since clarified that production adjustments could be halted or reversed if necessary.

“Crude has room for growth,” said Gui Chenxi, an analyst at CITIC Futures Co. “The third quarter is typically the peak season globally and should lead to increased processing and demand for oil.”

Market participants are closely watching future data, as any signs of weakening demand could greatly influence prices.

Conversely, stronger-than-expected industrial activity could support prices and offset some of the recent bearish sentiment.

Continued uncertainty led to cautious trading, with investors reluctant to make significant moves until more concrete information is available.

This cautious approach underscores the delicate balance the oil market is trying to maintain amid fluctuating global economic signals.

As the world’s largest importer of crude oil, China’s economic performance is a key barometer for global oil demand. The expected data from China will not only influence immediate trading strategies, but also provide longer-term market direction.

Meanwhile, the oil market remains in a slump, reflecting broader uncertainties in the global economy.