Oil prices fall as weak factory data fuels global demand worries

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Sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant

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  • Prices fell to the lowest in more than 2 weeks on Monday
  • Factories squeezed by higher prices, weak customer demand
  • US targets Chinese, Emirati companies in new Iranian oil sanctions

Aug 2 (Reuters) – Oil prices fell again on Tuesday as investors absorbed the bleak outlook for fuel demand, with data pointing to a global slowdown in manufacturing as major crude producers meet this week to determine whether to increase supply.

Brent crude futures fell 77 cents, or 0.8%, to $99.26 a barrel at 0421 GMT, while WTI crude futures fell 67 cents, or 0, 7%, to $93.22 a barrel.

The drop came after Brent crude futures slumped to a low of $99.09 a barrel on Monday, their lowest since July 15. The U.S. crude benchmark fell to $92.42 a barrel, its lowest since July 14.

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“Crude prices fell after a slew of factory activity data suggested the world was heading for a giant global economic contraction, and expectations for more oil output after a very strong earnings season for oil companies,” said Edward Moya, senior market analyst at OANDA. , in a footnote.

Recession concerns intensified on Monday as surveys in the United States, Europe and Asia showed factories struggled to find momentum in July. Lower global demand and China’s strict COVID-19 restrictions have slowed production. Read more

The price cuts also come as market participants await the outcome of a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, to decide of the September production.

Two of eight OPEC+ sources in a Reuters survey said a modest increase for September would be discussed at the Aug. 3 meeting. The rest said production should remain stable. Read more

A Fox Business reporter said Saudi Arabia will push OPEC+ to increase oil production at the meeting. Read more

“Upward momentum in oil prices is gradually fading…Once the supply and demand situation shows signs of further deterioration, oil should lead commodities lower,” Haitong Futures analysts said.

Meanwhile, the United States on Monday imposed sanctions on Chinese and other companies it says helped sell tens of millions of dollars worth of Iranian oil and petrochemicals to East Asia as they seek to put pressure on Tehran to curb its nuclear program. Read more

The possibility of a visit to Taiwan by US House Speaker Nancy Pelosi, despite Beijing’s warnings against her, also casts a cloud over the market. The visit would mark the first visit by a senior US official to the island in more than 25 years, which could heighten tensions between the United States and China. Read more

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Reporting by Stephanie Kelly and Muyu Xu; Editing by Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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