Market participants had oil trading session Wednesday, August 11, in deep dejection. Macroeconomic news, which came from two main consumers of hydrocarbons (U.S. and China), became another evidence of slowing economic recovery, thus depriving investors hope for further improvement in the demand for "black gold". Additional pressure on the quotations of oil futures have had a downturn in equity markets and the strengthening of the dollar. Not pleased with the bidders and regular data on stocks: report U.S. Department of Energy (US Department of Energy) has shown growth in gasoline stocks and a significant reduction in the supply of oil to the refinery of the country.
As a result of trades on Aug. 11 at the New York Mercantile Exchange price of a futures contract for WTI crude oil for September delivery fell 2.23 dollars - up to 78.02 dollars per barrel. At the InterContinental Exchange in London, the September contract for Class Brent Crude prices have fallen by 2.96 dollars to close at a mark of 77.64 dollars per barrel.
Growth of the Chinese economy seems to be falling faster than anticipated even a couple of months ago. The most important conclusion that can be done on the basis of responses to the environment of China's macro-economic data, was that the June weakness of the industrial countries was not a casual one-off phenomenon. The July figures were equally bad, analysts Capital Economics. According to statistics, last month, industrial production in China increased by 13,4% (which, incidentally, consistent with the expectations of analysts) against the increase of 13,7% in June and 16,5% in May.
Weaker than expected, proved and figures on investment. Since the beginning of the year rose to 24,9% in annual terms, against the projected 25.3%. Fell in China and the growth rate of retail sales: in July the increase rate was 17.9% in annual comparison, which is lower than the values of the previous month (18.3%), and the expectations of experts (18.5%).
In addition, very upset the oil market participants a statement of fact that the Fed slowing United States economy. This also contributed to the massive sales of oil futures. Recall the past up to the Aug. 10 meeting of the Committee on Open Market decided to retain the key discount rate in the range of 0-0,25% per annum, noting that the data for July showed a slowdown in U.S. economic growth. According to the agency to sustain the economic recovery of funds received from the federal agency securities and securities secured by a mortgage, will be reinvested in long-term U.S. Treasury bonds.
Let down the oil market and the correlation with stock indices and the dynamics of the dollar. Investors in the stock exchange and currency markets are not convinced the measures that are intended to take the Fed. "The infusion of liquidity into the system through the application of the purchase of debt securities will not help the average citizen of the country - said the chief market strategist at U.S. consulting company Banyan Partners Robert Pavlik. - This will not create jobs and help the housing market."
Against this background, as well as a consequence of negative news from China's share prices have collapsed, pulling the prices for oil. As a result of trading on Wednesday, the broad market index Standard & Poor's 500 fell 2.82%, the index of "blue chips" Dow Jones Industrial Average lost 2.49%, and high-tech NASDAQ index fell 3.01%. In Europe, Germany's DAX fell by 2,1%, the British FTSE 100 - on 2,44%, the French CAC40 - on 2,74%.
