International benchmark Brent crude fell as much as $92.78 a barrel as gloomy reports from the world’s two top economies fueled concerns that slowing global growth will weigh on industrial and consumer demand. U.S. West Texas Intermediate fell to $86.82, its lowest level since early February – before Russia invaded Ukraine. Both benchmarks later pared their losses later in the day with Brent down 3.1% at $95.10 and WTI at $89.41, down 2.9%. Monday’s moves came after Chinese economic data showed retail sales rose 2.7 percent year-on-year in July, while industrial production was 3.8 percent higher. Economists had forecast larger increases of 5 percent and 4.6 percent, respectively. Analysts at Goldman Sachs said the data showed that the recovery in growth after lockdowns in April and May spurred by the Omicron Covid-19 variant “stalled and even slightly reversed in July”. “This shows weak domestic demand amid sporadic Covid outbreaks, production cuts in some energy-intensive industries and [the] adverse effects of recent risk events in the real estate sector,” they added. In a bid to boost growth, China’s central bank on Monday cut its medium-term lending rate, through which it provides one-year loans to the banking system, by 0.1 percentage point to 2.75 percent. “Oil markets struggle to catch a break as weak macro data continues to put downward pressure [them],” analysts at Oilytics said, noting that the “gloomy” Chinese data followed poor data on consumer sentiment in Europe last week. Traders will also be closely watching talks to revive the Iran nuclear deal, as Tehran considers a new EU proposal to restart the talks. Any progress toward lifting sanctions on Iranian exports could boost crude markets. “Oil prices may swing more than a pendulum when it comes to ongoing Iranian nuclear talks,” said Tamas Varga at PVM Oil Associates. Data from the US added to the gloom over the global growth outlook on Monday. A New York Federal Reserve survey of manufacturers registered a minus 31.3 for August from 11.1 the previous month. Economists polled by Reuters had forecast a reading of 5. The surprise drop in the Empire State Index marked the index’s second-biggest monthly decline on record. On Wall Street, U.S. stocks capped gains after opening the session lower. The S&P 500 ended the day up 0.4%, while the tech-heavy Nasdaq Composite rose 0.6%. The broad S&P last week recorded its fourth straight week of gains. In bond markets, the yield on the 10-year U.S. Treasury note fell 0.05 percentage points to 2.8% as the benchmark edged higher. US government debt is typically seen as a safe haven in times of economic stress. Market participants on Wednesday will look to the minutes of the Federal Open Market Committee’s latest monetary policy meeting for clues about the central bank’s tightening plans. The dollar rose 0.8 percent against a basket of six major currencies on Monday. In Europe, the regional Stoxx 600 share index closed 0.3% higher. Chinese stocks fell, with the CSI 300 index of Shanghai and Shenzhen shares closing down 0.1 percent and Hong Kong’s Hang Seng index down 0.7 percent.
