Brent crude oil, the global benchmark, fell 4% to $67.87 a barrel, and West Texas Intermediate futures—the main U.S. benchmark—were down 4.3% at $65.38 a barrel. At those prices, both gauges were set for their lowest close in around 2½ months.
China is the world’s biggest importer of oil and “while some countries seem to be flipping to learning to live with the coronavirus, it is adopting a zero-tolerance policy” with stricter travel rules and quarantine measures, said Norbert Rücker, head of economics at Swiss private bank Julius Baer. This demand drop happens just as the OPEC+ agreed to increase supply, creating an imbalance that led to the price slide. Customs data showi that China imported less crude per day in July than in June, according to analysts at Dutch bank ING. Softening economic data out of Beijing also prompted Goldman Sachs to downgrade its 2021 Chinese economic growth forecast. All of which contributes to the recent oil price drop.
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