Crude oil prices today: Brent declines amid mixed data signals from China | 5 key points

Crude oil prices inched lower during the early trading hours on Monday, May 13, amid mixed signals emerging from China – the world’s second-largest oil consumer – which released crucial economic data last week.

Global crude benchmark Brent declined by around 0.3% in the international market, as compared to the last closing price. The fuel’s futures for July delivery were trading at $82.5 barrel at 0322 hours GMT.

The U.S. West Texas Intermediate (WTI) futures for June delivery were trading at $78.08, down 0.23% as against the previous close.

At India’s Multi Commodity Exchange (MCX), crude oil futures slated for deliveries later this month were trading at ₹6,528 per barrel, down 0.35%. The futures for June delivery declined by 0.38% to ₹6,510.

Here are five key points on the latest crude price movement

• The marginal downslide in rates, say analysts, is linked to the mixed signals sent by the Chinese economy. The country, on May 11, reported a 0.3% year-on-year (YoY) increase in consumer inflation in April 2024, but producer prices dropped by 2.4% during the same month.
• The decline in factory prices is lower as compared to a 2.8% drop in March, but higher than a slide of 2.3% estimated by the economists polled by Bloomberg.
• The oil market sees the demand from China as one of the factors that can move global rates. However, the country’s economy has failed to gain momentum in the post-Covid-19 period. A slow recovery in domestic demand, combined with a widespread real estate crisis, has dented its economy.
• The continued slump in factory prices shows China's economy has still a long way to recover, despite the recent recovery in exports, analysts said.
• Despite the slump in factory-gate level prices, another set of Chinese data released last week showed the domestic demand returning into the positive trajectory. The data showed imports increased by 8.4% in April, as compared to a 1.9% fall in March.

“A strong recovery in the Chinese economy is crucial for oil demand to remain upbeat. One of the reasons why the prices have edged below $85 a barrel despite the Middle East tensions and the Russia-Ukraine war is the tepid recovery in China,” a crude market analyst explained.