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Oil Tumbles Almost 4% on China Concerns

CommoditiesAug 02, 2021 03:11PM ET
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© Reuters.

By Barani Krishnan 

Investing.com — When China sneezes, everything else catches a cold, apparently. 

On Monday, it was oil.

Crude oil prices tumbled almost 4% after China's factory activity growth — measured by the Caixin/Markit Manufacturing Purchasing Managers' Index -- fell to 50.3 last month, its lowest since April 2020.

China’s economy had largely recovered from the disruptions caused by the first round of the coronavirus pandemic, but fears are growing that the highly-contagious Delta variant will pose new problems for the world's second-biggest economy.

“A slowdown in the world's second largest economy would be a big blow for the region at a time when numerous countries are struggling to get to grips with the latest Covid wave,” said Craig Erlam, analyst at New York’s OANDA.

While the overall number of infections in China is much lower than outbreaks elsewhere, there have been new cases registered in 14 of 32 provinces, raising the likelihood of additional strict containment measures.

“Clearly, Covid-19 still poses a risk to the demand recovery, particularly in countries where vaccination rates are still low,” said analysts at ING.

New York-traded West Texas Intermediate crude, the benchmark for U.S. oil, settled down $2.69, or 3.6%, at $71.26 a barrel. It was WTI’s sharpest one-day fall since July 16.

London’s Brent, the global benchmark for oil, was down $2.49, or 3.3%, at $72.92 by 3:05 PM ET (19:05 GMT), heading for its biggest drop since July 19.

Adding to the weight on oil was higher output from the Organization of the Petroleum Exporting Countries, which pumped an estimated 610 million barrels per day in July, its highest since April 2020, according to a Reuters survey.

 

Oil Tumbles Almost 4% on China Concerns
 

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Comments (13)
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 02, 2021 7:34PM ET
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The gold goes to India
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 02, 2021 7:31PM ET
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Virus supremacy is on.
Mike ND
Mike ND Aug 02, 2021 5:14PM ET
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Big bad China kitten falling asleep
Mitch Boch
Mitch Boch Aug 02, 2021 4:40PM ET
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Also republican congressmen are speading it with joe machin boat parties
Mitch Boch
Mitch Boch Aug 02, 2021 4:38PM ET
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Also kids are spreading covid like wildfire
Mitch Boch
Mitch Boch Aug 02, 2021 4:37PM ET
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More contagious varients thats why theyre speading faster.
Yup Tub
Yup Tub Aug 02, 2021 4:23PM ET
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How strange: new contagious strains of Covid have spreaded after mass vaccinations while last summer they didn't...
Alamin Mia
Alamin Mia Aug 02, 2021 3:34PM ET
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u r Bangladeshi
Benalish MTG
Benalish MTG Aug 02, 2021 3:29PM ET
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Wow, they pumped 610 million barrels per day?  I thought the world only uses 100 million barrels per day.  Seems like there's a wee bit of oversupply being pumped by OPEC?
Onuta Kingsley
Onuta Kingsley Aug 02, 2021 3:29PM ET
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nice
Razyanul Islam Suvo
Razyanul Islam Suvo Aug 02, 2021 3:21PM ET
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Very helpful, Thanks
Adil Farooq
Adil Farooq Aug 02, 2021 3:21PM ET
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how a future
Robert Cutler
Robert Cutler Aug 02, 2021 3:21PM ET
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Anybody notice how crude oil price is stuck around Putin's age
Razyanul Islam Suvo
Razyanul Islam Suvo Aug 02, 2021 3:20PM ET
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Thanks
 
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