Oil prices fell, in early Asian trading, on Wednesday, to continue the sharp losses they suffered in the previous session, as fears of a slowdown in Chinese demand, the largest oil importer in the world, after the issuance of weaker-than-expected economic data, overshadowed the positive progress in the bill to raise the oil ceiling. American religion.
Legislation brokered by President Joe Biden and House Speaker Kevin McCarthy to raise the US debt ceiling of $31.4 trillion passed an important hurdle, as it was approved by the Rules Committee and sent to the full House for discussion and a vote expected on Wednesday. Dealers are awaiting an expected vote on an agreement to raise the US debt ceiling of $31.4 trillion.
The change in prices
Brent crude futures for August delivery fell 23 cents to $73.31 a barrel by 0307 GMT, while US West Texas Intermediate crude fell 28 cents to $69.18 a barrel, erasing its gains in the first session after the release of data on the Chinese industrial sector, both of which fell by more than Four percent on Tuesday.
The Brent contract for July, which ends Wednesday, and US crude are heading for monthly losses of more than 7 percent and 9 percent, respectively.
Manufacturing activity in China contracted faster than expected in May due to weaker demand, with the official manufacturing Purchasing Managers' Index (PMI) falling to 48.8 from 49.2 in April. The data came in below expectations at 49.4.
Vivek Dar, Director of Commodity Research at the Commonwealth Bank of Australia, said: With China's industrial production and fixed-asset investment growing slower than expected last month, markets are concerned that Chinese demand for commodities will weaken more quickly than expected.
He added that the current pessimism surrounding commodity demand in China contrasts with the optimism that prevailed at the beginning of this year.
The deadline for US debt repayment roughly coincides with the meeting of the Organization of the Petroleum Exporting Countries and allies, including Russia, in what is known as the OPEC + bloc, on the fourth of June. It is not yet clear whether the bloc will increase production cuts while the decline in prices weighs on the market.
Last week, Saudi Energy Minister Prince Abdulaziz bin Salman called on short sellers who bet that oil prices would fall to caution, in a possible sign that OPEC+ may cut production.
However, statements by Russian oil officials and sources, including Deputy Prime Minister Alexander Novak, indicate that the world's third largest oil producer tends to leave production unchanged.
In April, Saudi Arabia and other members of OPEC + announced further voluntary cuts in oil production by about 1.2 million barrels per day, bringing the total volume of the bloc's cuts to 3.66 million barrels per day, according to Reuters calculations.
Traders are also awaiting industry data on US crude inventories, due later on Wednesday.
Seven analysts polled by Reuters estimated that crude oil inventories fell by about 1.2 million barrels in the week ending May 26.
