New Delhi: Crude oil prices fell further on Tuesday, a day after hitting a six-month low, due to weaker-than-expected Chinese economic data and concerns about a global slowdown. Retail sales and factory data in China increased, but far fell short of market expectations, according to analysts. Retail sales increased by 2.7% year on year in July, while industrial production increased by 3.8% year on year. In response to concerns about a slowdown, China’s central bank has reduced lending rates.
‘Crude prices are being weighed down by demand concerns stemming from disappointing US and Chinese economic data, forecasts of higher US crude production, and progress in Iran’s nuclear talks. Crude oil has seen a sharp rebound in the last few days, but has failed to hold the gains and has set new February lows, indicating that the bears remain in control,’ said Ravindra Rao, head of commodity research at Kotak Securities.
Concerns about growth and shaky risk sentiment amid tightening monetary policies may keep pressure on prices, he added. The October contract of Brent on the Intercontinental Exchange was trading at $94.27 per barrel at 11:05 a.m., down 0.87% from the previous close. The September West Texas Intermediate (WTI) contract on the New York Mercantile Exchange (NYMEX) fell 0.65% to $88.83 per barrel.
Investors also expect the US-Iran nuclear talks to resume, which could result in the lifting of sanctions on Iranian oil exports and support global supplies. The drop in oil prices is good news for India, which imports roughly 85% of its energy. Despite the drop in international crude prices, the country’s retail prices for gasoline and diesel remained unchanged. In the national capital, petrol was priced at ?96.72 a litre and diesel was sold for ?89.62 a litre.
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