The price of a barrel of Brent from the North Sea for delivery in October fell 2.53%, to close at $77.66.
A barrel of American West Texas Intermediate (WTI) maturing in September lost 2.97% to $74.37.
The market started the week on the wrong foot, announcing the drop of almost 30% year on year in foreign direct investments in China in July.
Those investments have decreased every month since June 2023, and the movement has increased significantly this year.
Foreign direct investment in China recorded its biggest drop in volume in the second quarter.
This figure adds to a series of poor indicators published in recent months, which showed in particular the contraction of manufacturing activity in July, the real estate sector, which remains depressed and a slight increase in unemployment.
“The evidence of slow demand is building,” said Again Capital’s John Kilduff on China. “Looking at the data we’re getting, it’s going to get worse.”
“Obstacles remain to the economic recovery” of the People’s Republic, says Susannah Streeter of Hargreaves Lansdown in a note.
Already gloomy, the market worsened with the news of the ceasefire negotiations in Gaza. US Secretary of State Antony Blinken said on Monday that Israeli Prime Minister Benjamin Netanyahu had “confirmed” that his country had accepted the American plan.
For the head of American diplomacy, it is now “up to the Palestinian Islamic movement Hamas” to do the same.
“The market has been on edge since Israel’s actions, especially the one carried out in Iran itself,” recalled John Kilduff. Hamas leader Ismaïl Hanieyh was killed at the end of July in northern Tehran during an attack on Israel.
“We expected a strong response from Iran and a regional war, but the Iranians suggested that, in the event of a ceasefire, they would not respond” to the attack on their territory, the analyst continued.
“So the geopolitical premium is gradually deflating and, without the concerns of the Middle East, we can approach a barrel (WTI) at 70 dollars,” he predicted.
For him, only the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement can prevent prices from sliding further.
To do this, they would have to go back on their commitment to increase their total production again from October.