Oil prices fall as weak Chinese data weighs

September 05, 2023 (MLN): Oil prices fell on Tuesday as weak Chinese data outweighed expectations of further supply cuts by leading OPEC+ members, Saudi Arabia and Russia.

Brent crude is currently trading at $88.51 per barrel, down by 0.33% on the day.

While West Texas Intermediate crude (WTI) is trading at $85.24 per barrel, down by 0.29% on the day.

Saudi Arabia is widely expected to extend voluntary oil cuts into October and Russia will unveil a new OPEC+ supply cut deal this week, according to its deputy prime minister, as Reuters reported.

Moscow has already announced it will cut exports by 300,000 barrels per day (bpd) in September, following a 500,000 bpd cut in August. Riyadh is also expected to roll over a voluntary 1 million bpd cut into October.

"Given market expectations, it is unlikely that the two producers would stray away from an extension and so risk a sell-off in the market," analysts from ING said in a client note.

On the downside, a private-sector survey showed on Tuesday that China's services activity expanded at the slowest pace in eight months as weak demand continued to dog the world's second-largest economy and stimulus failed to meaningfully revive consumption.

Analysts said the markets had priced in China's recent effort to boost the economy, offsetting support from the expected oil supply cuts.

In Japan, the world's third-biggest economy, household spending in July fell 5.0% from a year earlier, deeper than a forecast decline of 2.5% and continuing into a fifth month of falls.

 Copyright Mettis Link News