The oil loses ground, The growth worries

The oil loses ground, The growth worries

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Concerns over global growth were reflected in oil prices on Thursday, which dropped about 1% after already plunging more than 4% Tuesday and rebounded by around 1% on Wednesday.

A barrel of WTI crude traded Thursday at 0.94% to $ 56.80 on the Nymex (August futures contract), while the North Sea Brent dropped 0.8% to $ 63.30 for the September futures contract at Nymex closing (closed at noon in New York due to Independence Day).

Despite Opep +’s decision on Monday to extend its agreement to cut production until March 2020, operators are worried about a drop in global demand for crude, given the latest indicators of manufacturing activity in the world, published in recent days. In the United States, the Markit PMI manufacturing index stood at 50.6 in June, after 50.5 in May. It thus remains very close to the 50, equilibrium level between contraction and expansion of the activity.

In China, the PMI index calculated by the firm IHS Markit/Caixin, fell to 49.4 in June, after 50.2 in May, the lowest in 4 months. In the euro area, the manufacturing PMI fell to 47.6 from 47.7 in May. In Germany, it has even fallen in frank contraction, to 45.

The announcement Thursday of a new incident involving Iran has not helped to support crude prices. An Iranian ship suspected of delivering oil to Syria, in violation of sanctions against Damascus, was boarded Thursday off the British territory of Gibraltar.

According to Spanish Foreign Minister Josep Borrell, the operation would have taken place following a “request by the United States to the United Kingdom”. Washington said Thursday night that this operation was “excellent news”. The British ambassador to Tehran was summoned by the Iranian authorities.

On Wednesday, crude prices had reacted positively to the Energy Department’s release of 1.1 million barrels of weekly crude inventories. It should be noted, however, that this drop was less than expected (-3 million barrels).

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She is the Managing Editor for in-depth discussions and analysis as well as breaking news at Markets Morning. She works closely with Editor-in-Chief Zac Berry on content and publishing initiatives for the site. Brianna Clemons has worked as a financial journalist and editor since 1997. She lives in Bucks County, PA, with her husband, four young children and one dog.

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