Oil prices drop on China's economic woes

June 15, 2023 (MLN): Oil prices fell on Thursday extending decline of yesterday, attributed to China’s industrial output and retail sales growth in May falling short of expectations, highlighting need for additional steps.

Brent crude is currently trading at $73.40 per barrel, down by 0.12% on the day.

While West Texas Intermediate crude (WTI) is trading at $68.66 per barrel, down by 0.20% on the day.

Yesterday, both benchmarks, Brent and WTI marked a decline of 0.73% and 0.82% respectively.

China's industrial output grew 3.5% in May, down from an expansion of 5.6% in April, as Reuters reported.

The country's retail sales, a key gauge of consumer confidence, rose 12.7%, missing forecasts of 13.6% growth and slowing from April's 18.4%.

Priyanka Sachdeva, market analyst at Phillip Nova said, "China's post-COVID recovery has been bumpy and the mellowed first quarter economic standing has completely swept away any forecast of China’s revival pushing the global demand for oil to record highs."

Moreover, the U.S. Federal Reserve decided to maintain the interest rate at 5-5.25%.

On the other hand, the European Central Bank is expected to hike interest rates by another quarter percentage point at 5:15 PM PST today.

U.S. crude oil stocks rose by about 8 million barrels in the week ended June 9, according to data from the Energy Information Administration on Wednesday.

In addition, gasoline and diesel stocks also rose more than expected.

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