Oil price slump: Reports from US and China lead to fears of economic slowdown

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International oil benchmark Brent crude dropped down to $92.78 (£76.99) a barrel while US marker West Texas Intermediate slipped to $86.82 (£72.04).

West Texas Intermediate (WTI) in fact hit its lowest level since early February — before Russia invaded Ukraine.

Later in the day WTI settled at $89.41 (£74.20), down 2.9 percent and Brent settled down 3.1 percent at $95.10 (£78.94).

This comes as Chinese data shows retail sales rose 2.7 percent year on year in July with industrial production 3.8 percent higher.

This is somewhat lower than the 5 percent and 4.6 percent forecast respectively.

Goldman Sachs analysts said the data indicated the recovery from the Omicron variant lockdowns in April and May “stalled and even slightly reversed in July”.

This slump in the Empire State gauge was the second-highest monthly fall for the index on record.

A boost to crude markets could be provided however by removing sanctions on Iranian exports as Tehran considers a new proposal to restart talks with the European Union on reviving the nuclear deal.

Tamas Varga at PVM Oil Associates said: “Oil prices can swing wider than a pendulum when it comes to the perpetual Iranian nuclear talks.”

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