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On Monday, 19 May, global oil prices declined amid investor concerns about a slowdown in global growth. The reasons were the downgrade of the US credit rating by Moody’s and weak macroeconomic data from China.
According to Reuters, futures for Brent crude oil fell by 0.5% to $65.06 per barrel, while US WTI lost 0.4%, falling to $62.23 per barrel.
What is putting pressure on the market?
- Moody’s downgraded the US long-term credit rating, raising concerns about the US government’s solvency and forcing investors to avoid risky assets.
- In China, the world’s largest oil importer, industrial production and retail sales growth slowed, indicating that the economic recovery has lost momentum.
“The data from China fell short of expectations and raised doubts about the sustainability of oil demand in Asia,” Reuters analysts said.
Technical perspective
With the expiration of the June WTI contract on Tuesday, more attention is being paid to the July contract, which fell 31 cents, or 0.5%, to $61.66/barrel.
The oil market is currently caught between two poles: on the one hand, geopolitical tensions (particularly in the Middle East), and on the other, weakening economic momentum in the world’s largest economies. This undermines investor confidence and puts pressure on commodity markets
