Slower China GDP growth nudges oil prices lower
SINGAPORE, July 15: Oil prices slipped on Monday after China posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world's largest crude oil importer.
A horizontal drilling rig on a lease owned by Parsley Energy operates at sunrise in the Permian Basin near Midland, Texas US August 24, 2018. REUTERS/Nick Oxford
Brent crude futures LCOc1 for September fell 15 cents, or 0.2per cent, to $66.57 a barrel by 0611 GMT while US crude CLc1 for August was down 24 cents, or 0.4per cent, at $59.97 a barrel. Both contracts last week posted their biggest weekly gains in three weeks on cuts in US oil production and diplomatic tensions in the Middle East.
Refineries in the path of Tropical Storm Barry continued to operate despite flood threats while the storm has slashed US Gulf of Mexico crude output by 73per cent, or 1.38 million barrels per day.
"The supply side is keeping prices firm," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
China's economic growth slowed to 6.2per cent in the second quarter from a year earlier, in line with analysts' expectations, with demand at home and abroad faltering as the Sino-US trade war bites.
Still, China's industrial output and retail sales beat forecasts, "suggesting that the economy in China is healthier than we previously been pricing," McCarthy said.
China's crude oil throughput rose to a record of 13.07 million barrels per day in June, up 7.7per cent from a year earlier, following the start-up of two new, large refineries, official data showed on Monday.
ANZ analysts said China's crude oil imports year-to-date still looked impressive even as imports fell in June for a second straight month.
"We believe additional crude oil quota (given) to private refiners should keep the imports upbeat in H2 2019," the bank said.
In the Middle East, Iranian President Hassan Rouhani said in a televised speech on Sunday that Iran is ready to hold talks with the United States if Washington lifts sanctions and returns to the 2015 nuclear deal it quit last year.
Meanwhile Britain has offered to facilitate the release of the detained Iranian oil tanker Grace 1 if Tehran gave guarantees that it would not go to Syria.
"The Iran situation is also in focus. It's not making headlines but it has the potential to move markets around," CMC Markets' McCarthy said. -Reuters