Chinese blow to oil prices

Oil fell on weak manufacturing data from China and Japan, raising concerns about falling demand.

Thus, the month of July closed with a fall in oil prices.

Shock contract in Chinese construction industry

According to data released today, growth in Japanese manufacturing activity has slowed. In addition, manufacturing indicators in China unexpectedly shrank in July, and the outbreak of COVID-19 reversed the economic recovery.

The Purchasing Managers’ Index (PMI) in China fell from 50.2 to 49. Values ​​above 50 in the index indicate expansion over the previous month, while values ​​below indicate contraction.

Latest situation in oil market

While industrial contraction in the world’s two largest economies raised expectations of a reduction in oil demand, it pulled oil prices down.

The nearest futures barrel price of Brent crude fell 1 percent to $103.3. US light crude fell 1.2 per cent to $97.4.

impact on demand

Commenting on market concerns, CMC market analyst Tina Teng said disappointing China’s manufacturing PMI data is the primary factor putting pressure on oil prices today. Told.

The data shows a surprising contraction in economic activity, Teng was quoted by Reuters. This is proof that the recovery from the COVID restrictions for the world’s second largest economy may not be as positive as expected. Due to this the demand scenario in the crude oil market is deteriorating.

There is also the fear of tension and supply problems are followed.

Brent oil prices are also affected by increased risks to the economy. While worldwide inflation and rising interest rates raise the prospect of a recession that will reduce fuel demand, analysts say sales of automobile fuels have also plummeted.

On the other hand, investors will be closely monitoring the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and Allied Countries (OPEC+), which will take place this week to determine September supplies. The market expects the supply to remain stable.

This is reflected in fuel prices

The increase or decrease in the prices of petroleum products is also reflected in the fuel. Oil prices are an important factor in directly determining fuel prices in Turkey.

Since finished petroleum products are refined from crude oil, the price of crude oil also determines the prices of all finished products.

However, for the fall in oil prices to be reflected on fuel pump prices in Turkey, it must first affect international gasoline and diesel prices.

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