InfoQuest – West Texas Intermediate (WTI) crude futures in New York closed negative for a third straight day on Tuesday (July 16) as investors worried that a slowdown in the Chinese economy would hit demand, however, hopes were also weaker and the Federal Reserve (Fed) cut interest rates at its September meeting helped push crude oil futures into negative territory.
The West Texas Intermediate crude oil contract for August delivery fell $1.15, or 1.4%, to settle at $80.76 a barrel.
Brent crude (BRENT) will be delivered in September. Oil fell $1.12, or 1.32%, to close at $83.73 a barrel.
China's National Bureau of Statistics (NBS) revealed that China's GDP in the second quarter of 2024 grew by only 4.7%, the slowest expansion since the first quarter of 2023. In addition, China's GDP in the second quarter is still below analysts' expectations of 5.1% and a slowdown from the 5.3% expansion in the first quarter of 2024.
Dennis Kessler, vice president of trading at BOK Financial, said the Chinese economy continues to slow because the government has not taken many measures to support the economy. Many refineries in China have cut production as fuel demand weakens.
The International Monetary Fund expects the global economy to grow by 3.2% in 2024, unchanged from its April forecast. In addition, the IMF lowered its forecast for U.S. economic growth to 2.6% in 2024 from a previous forecast of 2.7%.
Crude oil futures fell in a negative session during the day. The positive factor came from increased investor confidence that the Federal Reserve is set to cut interest rates at its September meeting. This will help support economic activity and demand for oil.
The American Petroleum Institute (API) reported that U.S. weekly crude oil inventories fell by 4.4 million barrels, 33,000 barrels more than analysts had expected.
Investors will be watching the official weekly release of crude oil inventory from the U.S. government's Energy Information Administration (EIA) today at around 9:30 p.m. Thai time.
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