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Oil Prices Slide Amidst Robust Dollar and Apprehensions Over Chinese Economic Slowdown

Oil prices faced a downward trajectory on Monday (Aug. 14), influenced by the prevailing strength of the dollar and growing concerns regarding a deceleration in China’s economic growth, which, in turn, could dampen domestic oil demand.

The WTI crude futures experienced a decline of 68 cents, equivalent to 0.82%, resting at $82.51 per barrel. Simultaneously, BRENT crude futures dropped by 60 cents, translating to 0.69%, settling at $86.21 a barrel.

China’s ongoing economic deceleration continues to exert significant pressure on the oil market, with particular focus on the real estate sector. The sector’s turmoil is raising alarms of a potential crisis. Country Garden, China’s largest real estate developer, defaulted on interest payments for its dollar-denominated bonds that matured on August 6. Additionally, the company announced the suspension of 11 domestic bonds just yesterday.

This situation is reminiscent of events from two years ago, when another major Chinese real estate entity, Evergrande, defaulted on interest payments for debentures, causing widespread global concern. Given the pivotal role of the real estate sector in propelling Chinese economic growth, accounting for nearly 30% of the country’s economic output, this recent string of defaults is triggering apprehension over the economic landscape.

Sandra Cho, Head of Asia Pacific Research at CreditSights, a subsidiary of Fitch Ratings, pointed out substantial signs of vulnerability within China’s real estate sector. This includes a considerable decline in home sales during the first half of the year, painting a dire picture for the Chinese economy.

Furthermore, the robustness of the dollar has resulted in an increased cost for crude oil contracts priced in dollars, a scenario particularly challenging for investors holding alternative currencies. The dollar index, which gauges the dollar’s performance against six prominent currencies, demonstrated a 0.34% rise, reaching 103.1898 in the most recent assessment.

The eyes of investors are fixated on the impending release of the weekly US crude stock report. The data, which will be published by the US Energy Information Administration (EIA) tomorrow, is anticipated to offer insights into the current state of US crude inventories. This information holds the potential to influence the dynamics of the oil market in the immediate future.

The Spot Market is Open

Tuesday, August 15, 2023

Updated at


Crude Oil




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