WTI holds below $78.00 amid weaker US consumer demand and Chinese data – Crypto News – Crypto News
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WTI creeps lower toward $86.20s on weak China PMI, higher US production WTI creeps lower toward $86.20s on weak China PMI, higher US production

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WTI holds below $78.00 amid weaker US consumer demand and Chinese data – Crypto News

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  • WTI price edges lower to $77.75 on Monday.
  • The weaker US Consumer Sentiment and Chinese economic output data weigh on the black gold. 
  • China’s Industrial Production came in weaker than expected in May, adding pressure on the world’s top largest oil consumers.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $77.75 on Monday. The downtick of the black gold is backed by weaker US consumer demand and the downbeat Chinese Industrial Production data. 

Consumer sentiment dropped to a seven-month low in June, according to the preliminary report from the Michigan Consumer Sentiment Index released Friday. The Consumer Sentiment Index fell to 65.6 in June from May’s final reading of 69.1. The number was lower than expected at 72.0. In response to the data, the WTI price has edged lower amid worries about their personal finances and inflation.

Furthermore, the hawkish messages from the Federal Reserve (Fed) lift the US Dollar (USD) and weigh on the USD-denominated WTI. On Sunday, Minneapolis Fed President Neel Kashkari said that it is a “reasonable prediction” that the Fed will wait for more data until December to cut interest rates. Kashkari further stated that the Fed is in a very good position to get more economic and inflation data before making any decisions.

Last week, Fed Chair Jerome Powell said during the Fed policy press conference that the central bank does not yet have the confidence to cut rates and he needs more convincing evidence that inflation was moving to the 2% target. The higher-for-longer US interest rate narrative continues to exert some selling pressure on black gold as it increases the cost of borrowing, which can dampen economic activity and oil demand.

The Chinese Industrial Production for May missed expectations, and a slowdown in the property sector showed no signs of improvement, adding pressure on the world’s second-largest economy. Early Monday, China’s Retail Sales rose 3.7% YoY in May from 2.3% in April, which is better than the consensus of 3.0%. Meanwhile, Industrial Production increased 5.6% YoY in the same period, compared to 6.7% in the previous reading, weaker than the forecast of 6.0%, according to the National Bureau of Statistics (NBS). 

 

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