Oil dips in Asian markets, copper slides to 8-week low on China data

Oil prices slipped in Asian markets on Monday after a survey on Friday showed weaker US consumer demand and as May crude production rose in China, the world’s biggest crude importer. Copper, too, extended four weeks of declines after Chinese economic data highlighted persistent weak spots in the metal’s biggest market.

Copper fell as much 1.1 per cent to $9,631 a ton on the London Metal Exchange, heading for its lowest close in two months.

The world’s second-biggest economy released figures on Monday that bolstered concerns over a disappointing demand recovery. While retail sales were stronger in May, growth in industrial output and fixed-asset investment slowed, and the housing slump deepened.
 

Copper has rapidly retreated due to worries about rising global inventories and signs of weakness in China. Metals also came under pressure last week as the Federal Reserve dialed back expectations for rate hikes. Prices traded 1.1 per cent lower at $9,639.50 a ton.
 

Global benchmark Brent crude futures for August delivery were down 40 cents, or 0.5 per cent, at $82.22 per barrel.

The more-active August delivery WTI contract slipped 0.5 per cent to $77.7 per barrel.
 

That followed prices slipping on Friday after a survey showed US consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.
 

However, both benchmark contracts still gained nearly 4 per cent last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand.
 

“Last week’s robust rally was fuelled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC’s vested interest in crude oil, there is some scepticism around OPEC's forecasts," said Tony Sycamore, a market analyst at IG in Singapore.
 

“Friday’s soft US consumer confidence numbers suggest that the resilience of the American consumer and the US economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures,” he added.
 

Meanwhile, China’s May domestic crude oil production rose 0.6 per cent on year to 18.15 million tons, according to data released by the National Bureau of Statistics on Monday. Year-to-date output was 89.1 million tons, up 1.8 per cent from a year earlier. National crude oil throughput fell 1.8 per cent in May over the same year-ago level to 60.52 million tons, with year-to-date totalling 301.77 million tons, up 0.3 per cent from a year ago.
 

The country’s May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth.
 

The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world’s second-largest economy.

On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation.
 

After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several airstrikes against the group in southern Lebanon.
 

Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.