Strong losses for oil due to weak American and Asian economic data

Significant losses were caused to the price of oil globally, today, Thursday, due to fears related to the repercussions of weak economic data issued in the United States and Asia.

The price of a barrel of Brent crude futures contracts lost $3.76, or 4.63%, to reach $77.42 upon settlement, and the price of US crude futures contracts fell by $3.76, or 4.90%, to reach $72.9 upon settlement.

Before the closure, oil prices fell by more than 5% to their lowest levels in 4 months, as investors are concerned about the volume of global demand for oil following the release of weak data from the United States and Asia. The two benchmark crude oils were trading at their lowest levels since July 7.

Futures contracts for the month of the nearest maturity of the two crude oils are traded at a lower price than the month following it.

The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency also expected a scarcity of supply in the fourth quarter of this year, but US data showed, yesterday, Wednesday, that stocks are high.

One factor that may prompt investors to wait is the expected slowdown in the productivity of Chinese oil refineries. Operations fell in October from high levels in the previous month as demand for industrial fuels weakened and refining margins narrowed.

Chinese economic activity also rose in October with industrial production increasing at a faster pace and retail sales growth exceeding expectations.

With the escalation of the Israeli war on Gaza, American officials said on Wednesday that they would impose sanctions related to the oil sector on Iran, which has long supported the Hamas movement, which led the Al-Aqsa flood operation on October 7.

In addition, the National Oil Corporation in Libya announced the export of the first shipment of 600,000 barrels from the Erwan oil field through the port of Zawiya.

(Reuters, Al-Arabi Al-Jadeed)