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Oil stabilises today with the mixed numbers of the Chinese economy – London Business News | Londonlovesbusiness.com
![Oil stabilises today with the mixed numbers of the Chinese economy – London Business News | Londonlovesbusiness.com Oil stabilises today with the mixed numbers of the Chinese economy – London Business News | Londonlovesbusiness.com](https://mloyoq1wv9pf.i.optimole.com/w:auto/h:auto/q:mauto/f:best/ig:avif/https://londonlovesbusiness.com/wp-content/uploads/2024/03/China-trade.jpg)
Crude oil tends to be steady at the start of the new week with Brent and West Texas Intermediate benchmarks holding near $85 and $82 per barrel, respectively.
Oil movements come after the mixed data of the performance of the Chinese economy, with a slower-than-expected growth in the GDP and retail sales, which is a negative sign about the future demand for crude by the largest importer in the world.
Energy markets are also looking cautiously at the Middle East, with fears that the negotiations will falter after the targeting of Hamas’s second-in-command, keeping fears of a broader regional war in mind.
From China, gross domestic product (GDP) growth slowed from 5.3% to 4.7% in the second quarter on an annual basis, which exceeded expectations of 5.1%.
In addition, retail sales grew at their slowest pace since January 2023 by 2% in June on an annual basis, far from expectations for a growth of 3.3%, in addition to the continued contraction of house prices for the thirteenth month in a row and by 0.67% in the same period. While these numbers confirm the continued state of weak sentiment among households.
In contrast, industrial production growth slowed less than expected to 5.3% from 5.6%. While the manufacturing and high-tech sectors led growth in June, according to China’s National Bureau of Statistics (NBS).
NBS also spoke about the role of government support, improved external demand, and the development of high-quality productive power in supporting improved economic performance in the first half of this year.
These varying data may reflect the continued trend to support sectors with high quality and technology more than others, such as property or consumption. Therefore, periods of weaker growth than before may continue for an extended period.
As for the Eurozone, industrial production contracted for the second month in a row and at the fastest pace since last January by 0.6% in May, but this was less than expected at a contraction of 0.9%.
The Eurozone had presented a series of negative data over the past weeks, which was not conducive to the continuation of oil price gains, as the recovery of the region’s economy is a major part of the recovery in external demand in China, which in turn stimulates demand for crude.
On the geopolitical front in the Middle East, we witnessed a dangerous development over the weekend with the targeting of Mohammed al-Deif, Hamas’ second-in-command and one of its key masterminds. This targeting raises concerns about the possibility of continuing the negotiating path that will lead to a significant shift in the scene, but Hamas said it is continuing to negotiate, according to Reuters.
This faltering in the negotiations or their prolongation may continue the military actions in southern Lebanon, which may ultimately lead to a wide regional war that is not limited to those borders. This war may be a trap, endless and exhausting for the Israelis, according to The Washington Post, citing a former official in the Israeli National Security Council. Therefore, this may encourage Israel to drag the United States into this conflict, which may expand the scope of this war more and more.