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Oil prices down on dwindling storm impact, Chinese economic data
[NEW YORK] Oil prices sank about 1 per cent on Monday on signs that the impact of a tropical storm on US Gulf Coast production and refining would be short-lived, while Chinese economic data dimmed the crude demand outlook.
Brent crude futures settled at US$66.48 a barrel, losing 24 cents, while US crude settled at US$59.58 a barrel, shedding 63 cents, or 1.1 per cent.
Both contracts last week made their biggest weekly gains in three weeks on cuts in US oil inventories and diplomatic tensions in the Middle East.
"Crude prices softened as oil companies returned workers to offshore platforms as the effects of (the storm) have subsided," said Edward Moya, senior analyst at Oanda in New York. "With no major damage done oil output will start coming back online and we could see crude prices pare back some of last week's gains."
One US Gulf Coast refinery was restarting after shutting under threats of Tropical Storm Barry, while other refineries in the path of the storm continued to operate.
US offshore oil producers restarted 4 per cent of the production shut by Barry last week, according to a report on Monday by the US Bureau of Safety and Environmental Enforcement (BSEE).
Energy companies had slashed offshore US Gulf of Mexico crude output by 73 per cent, or 1.4 million bpd.
Chinese data showed industrial output and retail data beat expectations, but overall figures showed the country's slowest quarterly economic growth in decades.
China's oil throughput rose to a record 13.07 million barrels per day in June, up 7.7 per cent from a year earlier, following the start-up of two new large refineries, official data showed.
Still, economic growth of just 6.2 per cent in the second quarter of 2019 - the weakest in 27 years - highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump-start the economy.
"The basic message is that the second half of this year will see some depletion in global oil inventories but this will be followed by a dismal 2020, especially the first six months of next year," PVM analyst Tamas Varga said.
Easing tensions between the West and the Middle East also weighed on oil futures.
Iranian President Hassan Rouhani said in a televised speech on Sunday that Iran was ready to hold talks with the United States if Washington lifted sanctions and returned to the 2015 nuclear deal it quit last year.
British Foreign Secretary Jeremy Hunt said there remained a "small window" of time to save the Iran nuclear deal as Tehran signalled it would ramp up its nuclear programme.