Oil prices fell on Thursday, as unseasonably weak demand and plentiful supplies of crude and refined products offset strong Chinese factory data that could boost energy demand in the world’s No. 2 oil consumer.
China’s factory activity in July posted its fastest expansion in 18 months as new orders surged, a preliminary HSBC survey showed. Europe’s demand outlook was dimmer. Due to an influx of oil products from the United States, European refiners have been cutting runs or even idling plants at what should be one of the busiest times of the year.
This has pressured physical crude prices, with West African and North Sea barrels selling slowly even at bargain levels. “Brent is lower as a function of the fact that we’re at peak refinery season and there isn’t a lot of demand in the U.S. for Brent quality oil,” said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania.