Oil price falls on concerns about slowing demand in China

Crude oil futures closed Monday (Oct. 31) after reports that U.S. oil production rose to the highest level since the spread of the coronavirus began.

The market was also pressured by China’s weak economic data and concerns about the COVID-19 tightening measures. China’s tightening will impact oil demand.

  • WTI crude futures were down $1.37, or 1.6%, at $86.53 a barrel.
  • BRENT crude futures were down 94 cents, or 0.98%, at $94.83 a barrel.

According to the U.S. government data, oil production increased to almost 12 million barrels per day in August. This is the highest level since the beginning of the spread of COVID-19.

The market was also pressured by a report from China’s National Bureau of Statistics (NBS), which reported that the manufacturing purchasing managers’ index fell to 49.2 in October from 50.1 in September, while the services purchasing managers’ index fell to 48.7 from 50.6 in September.

The PMI index is below 50, which means that both the manufacturing and service sectors in China are contracting.

The measures announced by the government to contain the spread of COVID-19 and slow down exports have hit the Chinese economy hard.

The International Monetary Fund (IMF) lowered its forecast for Chinese economic growth from 4.4% in 2021 to 3.2% in 2022, down from 8.1% growth in 2021.

U.S. President Joe Biden called on oil and gas companies to use their record profits to help lower the cost of living for American families.

Investors are also waiting for a report on U.S. crude oil inventories to be released by the EIA tomorrow (November 2).

The Spot Market is Open

Tuesday, November 1, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.10

87.20

+0.67

+0.77%

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