Oil Futures Settle Sharply Lower On Growth Worries

Crude oil prices fell sharply on Monday amid concerns about outlook for energy demand after the latest manufacturing surveys showed factory activity in Asia and Europe weakened last month.

Also, traders appeared reluctant to create fresh long positions in the commodity ahead of this week’s OPEC+ meeting, in which the group is set to consider keeping output unchanged for September.

West Texas Intermediate Crude oil futures for September ended lower by $4.73 or about 4.8% at $93.89 a barrel.

Brent crude futures settled lower by $3.94 or about 3.8% at $100.03 a barrel today.

China’s National Bureau of Statistics said on Sunday that the nation’s factory activity contracted in July. The data said the country’s manufacturing PMI fell to 49 in the month from 50.2 a month earlier, due to fresh Covid-19 outbreaks.

The non-manufacturing gauge, which measures activity in the construction and services sectors, dropped to 53.8 from 54.7, and overall property loans rose at the slowest rate on record as of the end of June – raising concerns over slowing crude demand in the world’s largest importer.

The euro area manufacturing sector contracted in July as production logged the sharpest fall since the initial wave of the COVID-19 lockdowns in early 2020, final data from S&P Global showed.

The final manufacturing Purchasing Managers’ Index fell to a 25-month low of 49.8 in July from 52.1 in June. The flash reading was 49.6.

A report from Destatis said German retail sales logged an annual decline of 8.8% in June, the biggest fall since the beginning of time series in 1994, adding to concerns the bloc could fall into a recession.

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