Oil has fallen in price again this week. Weak economic performance from China was the main cause. In addition, high hopes for lower American interest rates will also cause the oil price to fall. The decline was slowed by lower US commercial reserves.
The price of oil has fallen slightly this week. On Thursday, July 11, oil traded at $85,40 per barrel. The oil price then fell until Tuesday, July 16. That day, oil reached $84,04. On Wednesday, July 17, the price of oil rose slightly again to $84,04.
The oil price came under pressure this week due to quarterly figures from the world's largest consumer, China. Data from the Chinese Statistics Bureau shows that Chinese GDP is only increasing by 4,7%. This means that economic growth is lower than the Chinese government's target of 5%. The growth rate is also weaker than the 5,3% in the first quarter.
In addition, retail growth in June is lower than market expectations. A Reuters poll shows that economists expected Chinese retail sales to grow 3,3%. It has now emerged that these have increased by only 2,0%. However, the industrial figures were stronger than the market expected. Analysts expected industrial production to grow by 5%. It has now emerged that the size of the industry increased by 5,3% in June. The high-tech industry even experienced growth of 8,8%.
US market optimistic
Developments in the United States also ensure that the oil price does not fall too sharply. Commercial reserves decreased sharply, just like last week. According to the American Petroleum Institute (API), commercial reserves fell by 4,4 million barrels. This is the third decline in a row. In addition, reserves had already decreased by 1,9 million barrels the week before. This is a sign that demand in the US market is increasing. That was in line with expectations. In the summer, the demand for oil generally rises due to an increase in air traffic.
In addition, optimism about a possible fall in interest rates is increasing. The chairman of the US central bank (Fed) Jerome Powell indicated in a press conference on inflation that the second quarter results are reason for some optimism. Lower interest rates lead to higher oil consumption, because the economy is doing better. As a result, the American demand for oil increases.
The diesel price has also fallen again this week. Diesel traded for €11 per 129,83 liters on Thursday, July 100. On Wednesday, July 17, the price of diesel had fallen to €127,98.