Oil prices fall on global recession worries (updated)
31/08/2022 04:34
* U.S. crude, gasoline stockpiles fall - EIA
* China factory data disappoints
* OPEC+ looks at output cut
(Updates prices, adds new quote, details)
By David Gaffen
NEW YORK, Aug 31 (Reuters) - Oil prices extended their slide
on Wednesday on investor worries that the global economy would
slow further with renewed restrictions to curb COVID-19 in
China.
Brent crude LCOc1 futures for October, due to expire on
Wednesday, were down $2.51 at $96.80 a barrel following
Tuesday's $5.78 loss. The more active November contract LCOc2
was down 62 cents to $97.22 a barrel.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were
down 44 cents, or 0.5%, to $91.20 a barrel by 12:36 p.m. EST
(1736 GMT), after sliding $5.37 in the previous session on
recession fears.
Both contracts fell by more than 3% in earlier trade.
"The weakness coming out of China has played a significant
role" in lowering prices, said Harry Altham, energy analyst for
EMEA & Asia at StoneX Group in London. "There are fears of
demand destruction across the West as interest rates rise and
inflation concerns grip Western economies."
The Joint Technical Committee of the Organization of the
Petroleum Exporting Countries (OPEC) and allies, together called
OPEC+, said it now sees an oil surplus this year of 900,000
barrels per day (bpd), up 100,000 bpd from its forecast a month
earlier. urn:newsml:reuters.com:*:nL1N3070O4
Some OPEC+ members have called for cuts. The group is next
due to meet on Sept. 5 amid weakening demand in Asia that
spurred Saudi Arabia to lower its official selling prices to
that region. OPEC's output rose to 29.6 million bpd in the most
recent month, according to a Reuters survey Wednesday, while
U.S. output rose to 11.82 million bpd in June, according to
federal data. Both are highest levels since April 2020.
U.S. crude stocks fell by 3.3 million barrels, the U.S.
Energy Information Administration said Wednesday, while gasoline
stocks were down 1.2 million barrels. EIA/S
China's factory activity extended declines in August due to
new COVID infections, the worst heatwave in decades and an
embattled property sector weighed on production, suggesting the
economy will struggle to sustain momentum. urn:newsml:reuters.com:*:nL1N30702O
Parts of China's southern city of Guangzhou imposed COVID-19
curbs on Wednesday, joining the tech hub of Shenzhen in battling
flare-ups and fuelling uncertainty over commerce and daily life
in two of the region's most economically vibrant
cities. urn:newsml:reuters.com:*:nL1N307085
Euro zone inflation jumped to 9.1% in August, another record
high, and is in line to hit double-digit territory, heralding a
string of big interest rate hikes even as a painful recession
appears increasingly certain. urn:newsml:reuters.com:*:nL1N3070N5
Russian action on natural gas lent further support. Gazprom
halted natural gas flows through Europe's key supply route on
Wednesday as the economic battle intensified between Moscow and
Brussels. urn:newsml:reuters.com:*:nL1N30704D
(Reporting by David Gaffen in New York, Julia Payne in London,
Mohi Narayan in New Delhi and Sonali Paul in Melbourne; Editing
by Jan Harvey, Jason Neely and David Gregorio)
((julia.payne@thomsonreuters.com; +44 207 542 1836;))