Global Crude Oil Market Falls Further, China's Economy Remains Risky

<p>Oil prices closed lower yesterday due to lower economic pressure in major crude importer China and a sharp increase in US crude inventories since the cold weather-induced increase in production this month.</p><p><br /></p><p>Brent crude for March ended yesterday was down $1.16 (1.4%) to $81.71 a barrel and the more actively traded April contract was down $1.89 (2.3%) to $80.55.</p><p><br /></p><p>West Texas Intermediate (WTI) crude was also down $1.97 (2.5%) to $75.85. Both benchmarks lost more than $2 a barrel in early trading.</p><p><br /></p><p>Manufacturing activity in China contracted for the fourth month in a row through January, according to an official survey of factories yesterday.</p><p><br /></p><p><br /></p><p>China's wider economy is struggling to gain momentum days after a court ordered the liquidation of property developer China Evergrande. The real estate sector has accounted for a quarter of China's GDP.</p><p><br /></p><p>Now, the Organization of the Petroleum Exporting Countries (OPEC) sees oil demand growth in 2024 driven by consumption in China.</p><p><br /></p><p>Crude oil prices were pressured after US Energy Information Administration data showed weekly crude oil inventories rose by 1.2 million barrels last week compared to analysts' expectations of 217,000 barrels.</p><p><br /></p><p>US domestic oil production rose back up to 13 million barrels a day earlier after close to 1 million barrels a day. It is the capacity during the cold weather earlier this month.</p><p><br /></p><p>Meanwhile, the Israel-Hamas war has widened their conflict in the Red Sea between the United States and the Iran-allied Houthi group.</p>