Oil futures ended lower Monday, seeing some pressure amid worries about China’s property sector.
Losses were modest, however, with the market seen as potentially overdue for a pullback after key crude benchmarks on Friday logged a seventh straight weekly gain.
Price action
-
West Texas Intermediate crude for September delivery
CL00,
-0.87% CL.1,
-0.87% CLU23,
-0.87%
fell 68 cents, or 0.8%, finishing at $82.51 a barrel on the New York Mercantile Exchange. -
October Brent crude
BRN00,
-0.03% BRNV23,
-0.03% ,
the global benchmark, fell 60 cents, or 0.7%, to settle at $86.21 a barrel on ICE Futures Europe. -
Back on Nymex, September gasoline
RBU23,
-2.05%
dropped 2% to finish at $2.906 a gallon, while September heating oil
HOU23,
-1.43%
shed 1.1% to $3.088 a gallon. -
September natural gas
NGU23,
+1.55%
gained 0.9% to finish at $2.795 per million British thermal units.
Market drivers
Oil has rallied this summer as Saudi Arabia in July implemented a voluntary production cut of 1 million barrels a day — a cut that was recently extended through September. Russia has also moved to extend an additional supply cut of 300,000 barrels a day.
But concerns about demand from China are seen as potentially capping the potential for further upside, analysts said. The focus has turned to the country’s property sector.
Country Garden Holdings Co., one of China’s biggest home builders, saw its shares plunge to another record low in Hong Kong trading Monday on news it was suspending trading for at least 10 onshore bonds. That added to fears about the health of the world’s second-biggest economy.
See: Country Garden’s stock slumps 18% after Morgan Stanley downgrade and bond suspension
“After a nice seven-week rally, oil was ripe for a pullback and China’s property woes did the trick,” said Edward Moya, senior market analyst at Oanda, in a note.
“If China doesn’t get some major stimulus, global growth concerns won’t be going away anytime soon. The oil market is likely to remain tight, but if China jitters intensify, Brent crude could still drop a few dollars,” he wrote.
