Oil drops as an oil field in Libya reopens and Chinese GDP falls short of expectations.
Oil fell for a second day as a key Libyan oil field restarted production and China’s economic growth failed to meet expectations.
Brent fell to $79 a barrel after losing 1.8 percent on Friday. A source close to the matter said production was restarted at Sharara, one of Libya’s largest oil fields, after protesters left the area. It was producing around 250,000 to 260,000 barrels a day before last week’s cut.
China’s economy grew more slowly in the second quarter than expected, and consumer spending fell significantly in June. Still, apparent oil demand at the world’s largest importer of crude oil rose 14 percent last month from a year ago.
Crude oil has risen in the past three weeks, but remains low this year as China’s sluggish economic recovery and the Fed’s monetary tightening put pressure on demand. US central bank officials are expected to raise borrowing costs again this month, signaling they are still open to further increases later in the year.
There are some signs that the market is finally tightening in this half, with OPEC+ members Saudi Arabia and Russia reducing their crude oil exports. These curbs helped Brent short $80 a barrel last week, with cuts in Libya and continued supply disruption in Nigeria.
Oil’s recent rise means that the price of Ural crude oil exported from Russia has exceeded the $60 ceiling set by the G7 to reduce Moscow’s oil revenue.