Crude oil tumbles as US factory data deepens demand concerns

Highlights

  • Crude oil edged lower on Monday.
  • The production at the US factories tumbled to the lowest level in September.
  • China's third-quarter economic growth has been dropped to the lowest level in the year due to power shortages.

Crude oil prices inched lower after touching multi-year highs on Monday as the US industrial output for September tumbled which has tempered enthusiasm about the demand. December delivery Brent Crude oil futures last traded at US$83.98 per barrel down 0.13%, whereas November delivery WTI crude oil futures traded 0.40% down at US$81.36 per barrel as of 19 October 2021 at noon AEDT.

The production at the US factories tumbled to the lowest level in September in the past seven months. The global shortage of semi-conductors has depressed the production of motor vehicles. Weaker industrial data has been compounded by rising expectations for production, further pressurizing the sentiments of the market.

Oil’s bullish sentiments

The rising energy demand and the outcomes of the OPEC meeting, held this month kept the sentiments for oil bullish. OPEC+ has faced pressure from various member countries to increase supply to the market as demand for crude oil has rebounded significantly in various parts of the world.

Prime Minister of Japan said that Japan would urge oil producers to ramp up their production to cool down the skyrocketing prices of energy costs in the industry.

Oil’s bullish drive

Source: Copyright © 2021 Kalkine Media

China's third-quarter economic growth has been dropped to the lowest level in the year due to power shortages in the country and sporadic outbreaks of COVID-19.

Bottom Line

Crude oil prices tumbled on Monday after surging to multi-year high levels as the US industrial output for September tumbled which has tempered enthusiasm about the demand.

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