Oil prices fall amid economic concerns
Oil prices started August on a very negative note, falling around 5% following weak data on manufacturing activity in major economies. The JPMorgan global manufacturing PMI weakened in July, due to lower production and new orders in developed economies such as the United States, the eurozone, Japan and the United Kingdom, while that emerging markets have recorded mixed growth.
Fears that a global slowdown could affect demand have gripped commodity markets over the past two months and could continue to pressure as the economic outlook darkens and recession risks increase.
However, supply remains a favorable wind for oil prices which offsets some of the economic concerns. The United States has just announced sanctions against four Iranian oil transport companies due to the failure of nuclear negotiations with the Iranian regime.
Operators are now awaiting the results of Wednesday’s OPEC+ meeting, where the organization could increase production more than expected. A Fox News reporter tweeted on Monday that Saudi Arabia will push OPEC+ to increase oil production at the meeting, as Saudi King Salman bin Abdulaziz assured Joe Biden when they met on July 16.