Oil prices fell on Wednesday on weak economic data from China and Europe and a rise in U.S. crude inventories, almost erasing the previous session’s sharp gains after the U.S. said it would delay tariffs on some Chinese products.
Brent crude LCOc1 was down $2.08, or 3.4 per cent, at $59.22 a barrel at 1214 GMT, after rising 4.7 per cent on Tuesday, the biggest percentage gain in a day since December.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were down $2.13, or 3.7 per cent, at $54.97 a barrel, having risen four per cent the previous session, the most in just over a month.
Read Also: UK, Norway to offer support for Nigeria’s Oil, gas sector
China reported a raft of unexpectedly weak data for July, including a surprise drop in industrial output growth to a more than 17-year low, underlining widening economic cracks as the trade war with the U.S. intensifies.
“This morning’s Chinese industrial production came in below expectations confirming our expectation that the late-cycle dent likely becomes deeper before year-end,’’ Norbert Ruecker of Swiss bank Julius Baer said, referring to the late-cycle phase in economies that are characterised by slowing growth.
“Oil demand should continue to soften,’’ he added.
The global slowdown amplified by tariff conflicts and uncertainty over Brexit is also pressuring European economies.
A slump in exports sent Germany’s economy into reverse in the second quarter, data showed.