Oil costs fell more than 5% on Monday due to customer development for the return of Iranian oil to the market.
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Published
Oil costs fell more than 5% on Monday due to emerging consumers of a return of Iranian oil to the market and knowledge that it appears that China’s economic recovery is reeling under Covid-19 restrictions.
Stock markets were broadly strong and the dollar traded mixed, as investors welcomed the symptoms of a slowdown in inflation in the United States, which, however, remains at its point in decades.
“It looks like the dark clouds of recession are emerging as far as the global economy is concerned, and the latest Chinese insights reinforce fears,” said market analyst Michael Hewson of CMC Markets UK.
China’s central bank cut key interest rates on Monday in a wonderful move, as a series of data showed weakness in the world’s second-largest economy.
The figures show that China’s trade production and retail sales expanded in July below expectations.
Industrial production rose by 3. 8% year-on-year, but down from 3. 9% in June and well below analysts’ forecasts.
“The threat of stagflation in the global economy is expanding and the foundations for national economic recovery are still solid,” China’s National Bureau of Statistics warned.
Stagflation refers to long-term peak inflation combined with emerging unemployment and low growth.
Beijing’s uncompromising adherence to a 0 Covid strategy has slowed the economic recovery, as lockdowns and long quarantines hamper business activity and the recovery of consumption.
Hewson added that “problems in the real estate sector don’t help either, where many homebuyers interrupt loan bills to protest delays in the completion of new homes. “
– Speak Iran –
Meanwhile, Iran’s foreign minister said Tehran would present its “final” proposal later on Monday on talks to revive its 2015 nuclear deal with world powers, after Washington agreed to major demands.
A deal would mean Iran’s crude output of 2. 5 million barrels per day would no longer be subject to foreign sanctions and ease the source restrictions that have pushed up prices.
“Iran would flood the market,” said analyst Aditya Saraswat of energy research company Rystad, adding that the country could increase production by millions of barrels per day.
Oil prices, which had already fallen especially according to Chinese data, even drove the decline and registered falls of more than 5%, and then recovered part of their losses.
Major European stock markets ended modest gains, while Wall Street inventories fell in morning trading.
Market analyst Fawad Razaqzada of City Index and FOREX. com said talks about a U. S. recession had returned after a key survey plunged into the negative, a sign of deteriorating trading conditions.
Markets are also eagerly awaiting minutes from the Fed’s last policy meeting in July to get clues about the U. S. central bank’s interest rate plans. USA
Investors are concerned that after successive three-quarter-point accumulations, any additional accumulation of a magnitude will stifle the economic recovery.
The negative reading of the new orders inquiry from the New York Federal Reserve’s Empire State Manufacturing Survey, compared to July’s positive result, shows that interest rate hikes would likely already have an effect on the slowdown in activity that has fueled inflation.
Patrick O’Hare, an analyst at Briefing. com, called the decline in inventory costs a mirror image of “a weakening demand that is accompanied by a weakened economy and, through extension, a weakened outlook for earnings growth. “
– Key figures 15:30 GMT –
North Sea Brent: 4. 0% to $94. 21 consistent with barrel
West Texas Intermediate: Down 4. 1% to $88. 28 consistent with a barrel
New York – Dow Jones: DOWN 0. 1% to 33,742. 42 points
EURO STOXX 50: UP 0. 3% to 3,787. 61
London – FTSE 100: UP 0. 1% to 7,509. 15 (close)
Frankfurt – DAX: UP 0. 2% at 13,816. 61 (close)
Paris – CAC 40: UP 0. 3% to 6,569. 95 (closing)
Tokyo – Nikkei 225: UP 1. 1% at 28,871. 78 (close)
Hong Kong – Hang Seng Index: DOWN 0. 7% to 20,040. 86 (close)
Shanghai – Composite: FLAT at 3,276. 09 (closing)
Euro/Dollar: DOWN to $1. 0187 vs. $1. 0261 on Friday
Pound/dollar: LOW to $1. 2082 from $1. 2135
Euro/pound: LOW to 84. 37 pence from 84. 53 pence
Dollar/yen: DOWN to 133. 06 yen from 133. 50 yen
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