Economic Data Released in China Lowered Oil Prices

The latest data on production and consumption released by the Chinese economy caused an increase in concerns about economic stagnation. The effects of July inflation, which came below expectations in the US last week, caused the price of Brent oil, which saw over $ 100 a barrel, to fall 5.2 percent to $ 93 a barrel today.

Economy news: Last week, annual inflation in the US was announced as 8.5 percent in July, against the expectation of 8.7 percent. This brought up the possibility that the Fed might put the brakes on interest rate hikes in the coming months. While the expectation that demand will increase with this pricing led to an increase in oil prices, the price of Brent oil, which hovered around $ 96 a barrel before the data in question, exceeded $ 100 a barrel on Friday. On the first day of the new week, not the world's largest but the second largest economy took its place on the agenda. According to the data released today, manufacturing industry production in China declined by 0.1 percent in July compared to the previous month, while retail sales fell by 0.4 percent. Following this situation, the Chinese Central Bank unexpectedly cut interest rates by 10 basis points. China, which implemented a 'zero tolerance' policy against the coronavirus epidemic, faced the risk of recession in the economy due to these measures. For this reason, while central banks around the world, especially the Fed, increased interest rates, China, on the contrary, cut interest rates for the second time this year. With this effect, the barrel price of Brent oil fell 5.1 percent to 93.2 dollars.