Oil prices fall due to weakness in China’s economic data. Which has sparked concerns over demand from the world’s largest crude oil importer. The Chinese economy slowed unexpectedly in July (industrial production decreased by 0.1% in July compared to the previous month, retail sales decreased by 0.4% from June and by 0.7% compared to the previous year), while refinery production dropped to 12.53 million barrels per day, the lowest level since March 2020, according to government data. Thus, on the markets, Brent and WTI have suffered drops of up to 5%. The position taken by Saudi Aramco also has an impact, declaring that it is ready to increase the production of crude oil to its maximum capacity of 12 million barrels per day (bpd) if the Saudi government requests it.
The markets are also looking at negotiations on the Iranian nuclear deal, which could lead to the end of sanctions for this key member of OPEC. However, obstacles remain and, as reported by a diplomat quoted by the official agency Irna, Tehran is looking for guarantees on some points. According to analysts, the pressure on oil prices will intensify if the talks are successful. After the surge at the beginning of the year, due to the increase in demand with the end of the lockdown and the beginning of the Russian invasion of Ukraine, prices have fallen by more than 20% since the beginning of June.