Crude oil futures closed lower on Wednesday (Sept. 7) as weak Chinese trade data fueled investor fears of a recession. Markets were also pressured by global central banks’ intentions to raise interest rates. This could hurt economic activity and oil demand.
- WTI crude futures fell $4.94, or 5.7%, at $81.94 a barrel.
- BRENT crude futures fell $4.83, or 5.2%, at $88 a barrel.
WTI and Brent both closed at their lowest levels since January this year, with Brent falling below $90 for the first time since February 8.
Markets are under pressure due to disappointing trade data from China. The China Customs Administration (GAC) reported that Chinese exports grew by only 7.1% in August, a significant slowdown from the 18% growth in July.
Meanwhile, August imports rose only 0.3%, slowing from a 2.3% gain in July.
The GAC data said that China, the world’s largest crude oil importer, imported 9.5 million barrels of crude oil per day in August, up from 8.79 million barrels per day in July.
Crude oil imports amounted to 9.92 million barrels per day in the first eight months of this year, down 4.7% year-on-year due to lockdown measures in major cities. This has led to a decline in oil demand.
The market was also influenced by investor concerns about an upward trend in interest rates. The European Central Bank (ECB) plans to raise interest rates by 0.75% at its meeting today. The Fed is also expected to raise rates by 0.75% on September 21.
Yesterday, the Bank of Canada raised its key interest rate by 0.75% to 3.25%, its highest level in 14 years. The Reserve Bank of Australia raised its key interest rate by 0.50% to 2.35%, with both central banks announcing further rate hikes to curb inflation.
Investors are waiting for the U.S. crude oil inventories report to be released by the EIA today, while analysts in the S&P Global survey forecast a 1.8 million barrel drop in U.S. crude oil inventories for the week ending September 2.
The Spot Market is Open
Thursday, September 8, 2022
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 11.30 | 82.78 | +0.82 | +1.00% |