prices rebounded slightly after sources from OPEC+ said there was no need to release more oil despite US pressure to add supplies to check an oil price rise. (Shutterstock)
NEW YORK: Oil prices slipped more than 1 percent on Monday, paring steep losses on weak Chinese economic data after sources told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and its allies believe the markets do not need more oil than they plan to release in the coming months.
The market had dropped more than 3 percent earlier in the session after data showed Chinese factory output and retail sales growth slowed sharply in July, missing expectations as flooding and fresh outbreaks of COVID-19 disrupted business activity.
Crude oil processing in China, the world’s biggest oil importer, last month also fell to its lowest level on a daily basis since May 2020 as independent refiners cut production in the face of tighter quotas, elevated inventories and falling profits.
“(Concerns) about the spread of the delta variant in China and the effects this will have on oil demand are continuing to weigh on prices,” Commerzbank said in a note.
However, prices rebounded slightly after sources from OPEC+ said there was no need to release more oil despite US pressure to add supplies to check an oil price rise.
OPEC+ agreed in July to boost output by 400,000 barrels per day a month starting in August until its current oil output reductions of 5.8 million bpd are fully phased out.
Two of the OPEC+ sources said the latest data from OPEC and the International Energy Agency (IEA) also indicated there was no need for extra oil.