China released data on Monday showing slower economic activity in July, including manufacturing, investment, consumer spending and almost every other metric. Crude markets reacted immediately, with WTI dropping more than $5/bbl, to the $86/bbl range, the lowest price since January 2022. WTI did a partial recovery after hitting the low, eventually settling at $89.41/bbl, down $2.68/bbl.
In another bearish development, the Iran nuclear deal offered last week by the EU is being seriously considered by both Iran and the U.S. If approved, that would increase oil production from Iran, a negative for oil prices. According to Bloomberg, Iran sent the EU it’s official response today and has signaled that it may be near a deal with the U.S. that could restore Iranian oil exports.
It was another relatively flat day for natural gas. The Henry Hub September contract moved $0.04/MMbtu lower to settle at $8.728/MMbtu. That is still over $1/MMbtu higher than this time last week.