China’s Service Activity Index Falls and Consumer Spending Reports Impact
“It is difficult to achieve the target of rising oil prices even after production cuts due to economic impact”
International oil prices, which rose to their highest level in five weeks after OPEC+’s decision to cut production by 2 million barrels a day, fell again due to concerns over weakening demand from China.
The benchmark Brent crude fell 0.1% to $97.85 a barrel in the morning trade, according to MarketWatch on the 10th (local time). US West Texas Intermediate crude fell slightly to $92.61 a barrel.
The Wall Street Journal reported today that consumer spending fell during China’s National Day holiday. Prior to this, China’s private sector service sector activity index fell over the weekend after growing for the third straight month.
OPEC and its allies, including Saudi Arabia and Russia, decided at a meeting last week to cut production by 2 million barrels a day starting in November in an effort to boost oil prices.
Analysts at Evercore estimate that production will be cut by 500,000 to 1.1 million barrels per day in reality, taking into account the quota for each producing country.
Fitch, an international ratings agency, said on the same day that “the recent increase in global oil inventories suggests that the market is overproducing.” He also pointed out that “OPEC+ will aim to raise oil prices through market equilibrium by changing production allocations and available crude oil supply”, but pointed out that “it may be difficult to achieve an agreement among member countries due to economic stagnation in developed markets and uncertainties in demand.”
By Kim Jung-ah, staff reporter [email protected]