Oil prices fall on weaker US consumer demand, China data

FILE PHOTO: A view shows oil tanks of Transneft oil pipeline operator at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo

By Colleen Howe and Mohi Narayan

NEW DELHI -Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker U.S. consumer demand and as May crude production rose in China, the world's biggest crude importer.

Global benchmark Brent crude futures for August delivery were down 29 cents, or 0.4%, at $82.33 per barrel at 0330 GMT. U.S. West Texas Intermediate crude futures for July delivery were also down 29 cents at $78.16 a barrel.

The more-active August delivery WTI contract slipped 0.4% as well at $77.76 per barrel.

That followed prices slipping on Friday after a survey showed U.S. consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.

However, both benchmark contracts still gained nearly 4% last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand.

"Last week's robust rally was fuelled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC's vested interest in crude oil, there is some scepticism around OPEC’s forecasts," said Tony Sycamore, a market analyst at IG in Singapore.

"Friday's soft U.S. consumer confidence numbers suggest that the resilience of the American consumer and the U.S. economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures," he added.

Meanwhile, China's May domestic crude oil production rose 0.6% on year to 18.15 million tonnes, according to data released by the National Bureau of Statistics on Monday.

Year-to-date output was 89.1 million tonnes, up 1.8% from a year earlier. National crude oil throughput fell 1.8% in May over the same year-ago level to 60.52 million tonnes, with year-to-date totalling 301.77 million tonnes, up 0.3% from a year ago.

The country's May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth.

The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world's second-largest economy.

On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation.

After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several air strikes against the group in southern Lebanon.

Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.

(Reporting by Mohi Narayan in New Delhi and Colleen Howe in Beijing; Editing by Sonali Paul and Stephen Coates)