Oil Slips on Signs of Muted Demand
by Bloomberg | Julia Fanzeres
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil edged lower as traders assessed signs of muted demand in the US and China, while equities rose as the market digested the attack on Donald Trump and looked ahead to earnings.
West Texas Intermediate slipped 0.4% to settle below $82 a barrel on Monday. Prices have fallen off their monthly highs, with US summer consumption seen as having peaked during the Fourth of July holiday. Lackluster economic data from China is raising concern about demand from the largest crude-consuming country.
“There is a strong seasonal tendency for crude prices to reach their top range after the first two weeks of July,” and bearish economic news is “pushing traders into a profit-taking mode,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities.
In broader markets, an assassination attempt on Republican presidential contender and former President Trump injected more uncertainty into the US election race, while investors ratcheted up wagers that he would win back the White House, aiding the dollar and weighing on treasuries.
Algorithms are also adding to the downward momentum, with TD Securities estimating that a break below $80 in WTI crude could force trend-followers to liquidate nearly 80% of their current long positions over the next week. This suggests that the window for large-scale algorithmic selling is now finally open, Daniel Ghali, a commodity strategist at TD, wrote in a note to clients.
Headline oil price swings have been lackluster of late, with one gauge of volatility falling to the lowest level since 2015. Still, other markers have moved significantly, with key timespreads that provide a gauge of market health surging last week, indicating tighter supplies.
Meanwhile in China, the appetite for raw materials including crude has shrunk over the first six months of the year, which piled on pressure for Beijing to boost confidence at a major policy meeting this week. The nation’s GDP growth slid to the smallest in five quarters. The International Energy Agency has cautioned that China’s slowdown is weighing on global oil consumption growth.
Prices:
- WTI for August delivery fell 30 cents to settle at $81.91 a barrel in New York.
- Brent for September settlement slipped 18 cents to settle at $84.85 a barrel.
by Bloomberg | Julia Fanzeres
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas