Sharp Decline in Oil!

On the first trading day of the new week, it was noted that negative pricing regarding the economic outlook of China, the world's largest oil importer, led to a sharp decline.

Sharp decline in oil. While US crude oil and Brent oil fell by up to 5 percent, US crude oil fell below $ 88 and Brent oil fell below $ 94. Expectations regarding China played an important role in pricing. The economic recovery in China unexpectedly weakened in July as coronavirus outbreaks affected consumer and corporate spending. Industrial production rose 3.8 percent from a year ago, down from 3.9 percent in June and economists' forecast of a 4.3 percent increase. While economic activity in the country declined, there was a surprise move from the Central Bank of China. The Chinese Central Bank unexpectedly cut interest rates by 10 basis points to increase support for the economy. Vandana Hari, founder of Singapore-based Vanda Insights, said, "While renewed Covid lockdowns in China are putting pressure on demand, recession concerns are also rising, while supply concerns have disappeared." Hari added that the possibility of Iranian supply returning contributed to the bearish trend.