Stock Market

Oil ticks lower after weak China data underlines demand worries

Oil futures fell Monday after weak economic data from China underlined demand fears tied to COVID-19 lockdowns, while Shanghai officials announced a partial opening of some businesses in the country’s largest city and key commercial hub.

Price action
  • West Texas Intermediate crude for June delivery
    CL.1,
    -0.91%

    CL00,
    -0.91%

    CLM22,
    -0.91%

    fell $1.58, or 1.5%, to $108.91 a barrel on the New York Mercantile Exchange.

  • July Brent crude
    BRN00,
    -1.01%

    BRNN22,
    -1.01%
    ,
    the global benchmark, was down $1.67, or 1.5%, at $109.88 a barrel on ICE Futures Europe.

  • June natural gas
    NGM22,
    +2.30%

    rose 1.2% to $7.863 per million British thermal units.

  • June gasoline
    RBM22,
    +0.31%

    edged down 0.2% to $3.95 a gallon after ending Friday at a record, while June heating oil
    HOM22,
    -1.39%

    shed 1.9% to $3.8453 a gallon.

Market drivers

China’s National Bureau of Statistics said that retail sales fell 11.1% on year in April, widening from a drop of 3.5% in March. Economists polled by The Wall Street Journal had looked for a 5.4% decline.

China’s industrial production also unexpectedly dropped, falling 2.9% from a year earlier in April, after a 5% on-year increase in March, coming in well below the 1% growth anticipated by surveyed economists.

Concerns around China and its consumption levels have served as a partial counterweight to supply worries that have been amplified by Russia’s invasion of Ukraine. Meanwhile, Shanghai allowed supermarkets, malls and restaurants to reopen in limited capacity on Monday.

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Oil futures surged over 4% on Friday to turn positive for the week. The push higher by the petroleum complex was led by gasoline futures, which ended at a record.

“The continuous inventory withdrawal over the past few weeks has pushed U.S. gasoline stocks to levels significantly below the five-yr average at this point in the season and reflects acute supply tightness,” said Warren Patterson, head of commodities strategy at ING, in a note. “Refineries increased operating rates last week to improve supply; however, a shortfall persists.”

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