Weak Chinese Economic Data, Bank Downgrades Create Selloff
August 8, 2023
Oil prices have sold off here this morning as there was some weak economic data from China, and Moody’s downgraded the credit rating of 10 midsize and small US banks, adding to the risks of stress in the banking sector.
Chinese crude oil imports fell 16% from June to July to a 6-month low. China also saw exports fall by 14.5% year over year and imports fell 12.4% year over year.
Saudi Aramco’s CEO, Amin Nasser, said that the company’s supplies to customers remains adequate even with recent voluntary oil production cuts by the kingdom. He said, “We still have adequate supply to satisfy our customers.” He also stated that despite the economic challenges, Aramco has seen positive signals that global demand remains resilient, and that Chinese demand will continue to grow. He said, “There is still a lot of mileage from China and the economy (to pick) up. “He added that the aviation sector was at 85% compared to pre-pandemic levels, indicating room for growth.
Saudi Aramco reported a near 38% decline in second-quarter net profit on Monday amid weaker oil prices and thinner refining and chemicals margins.