Weaker than Expected Economic Data from China Helps Energy Selloff
July 16, 2024
The Baker Hughes Rig Count had oil rigs down 1 to 478 oil rigs, last year there were 537 and the 5-year average is 496 and the 5-year high is 784. As has been mentioned, despite lower rig counts US crude oil production has held steady right around 13 million bpd for months of this past year.
Energy prices were soft in yesterday’s trading RB and Crude Oil were down and HO was just a bit positive on the day. The daily ranges were pretty tight with no conviction from the bulls or the bears. It has been said that the bulls needed to rally these markets if they were going to take the markets higher. After several days with no upside break out it appears the bears are taking their profits and getting these markets back into their ranges.
Weaker than expected economic data from China is also helping the sell off and the news from Federal Reserve Chairman, Jerome Powell, that he would not provide the timing of interest rate cuts. China’s economy grew at 4.7% in the second quarter. That was the slowest since the first quarter of last year.
The ongoing talks between Israel and Hamas have offered no development but are also a bearish item for the market to support this test lower.
Yemen’s Houthi rebels have upped their recent activities in the Red Sea and reports say three vessels have been targeted. One was an oil tanker and these activities demonstrate that Middle East tensions are alive and well.