The Strategist

Oil price fall accelerates on fears over coronavirus

08/03/2021 - 03:54

The fall in global oil prices accelerated on Monday evening to as much as 3%, with investors assessing the impact of the coronavirus on the global economy and oil demand, trading data showed.

Greg Goebel
Greg Goebel
The price of October Brent crude futures was down 2.9% to $73.22 a barrel. September WTI futures were down 3.2% to $71.58 per barrel.

Traders continue to assess the coronavirus situation. The growth of Delta strain disease in China resulted in imposition of additional travel restrictions in some cities, which had a negative impact on investor sentiment. China is the largest oil importer, so data on the state of the country's economy is affecting sentiment in the oil market.

Market turmoil was also intensified by the statistical data from China that failed to meet analysts' expectations. The index of business activity in the country slowed down to 50.4 points in July. Analysts expected the index to slow to 50.8 points.

Bob Yawger, director of energy futures at Mizuho, cited by Bloomberg, said China's data was worse than expected. "There are concerns that this is because of COVID," he added.

In addition, in the US the index of business activity in industry in July was also worse than expected. The index fell to 59.5% against a forecast of 60.9%.