Written by Colin Howe and Mohi Narayan
NEW DELHI (Reuters) – Oil prices fell in Asian trading on Monday after a survey on Friday showed weak US consumer demand and with crude production rising in May in China, the world's largest crude importer.
Global futures for August delivery fell 29 cents, or 0.4 percent, to $82.33 a barrel by 0330 GMT. US West Texas Intermediate crude futures for July delivery also fell 29 cents to $78.16 a barrel.
The most active West Texas Intermediate crude contract for August delivery also fell 0.4% to $77.76 a barrel.
This came after prices fell on Friday after a survey showed that US consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.
However, both benchmark contracts rose about 4% last week, the highest weekly percentage increase since April, on signs of increased fuel demand.
“Last week's strong rally was driven by expectations of strong demand in 2024 from OPEC+ and the IEA. However, given OPEC's established interest in, there are some doubts about OPEC's outlook,” said Tony Sycamore, market analyst at IG in Singapore.
He added: “Friday's weak US consumer confidence numbers indicate that the resilience of the US consumer and the US economy will be tested as households drain their savings to combat rising interest rates and cost-of-living pressures.”
Meanwhile, China's domestic crude oil production in May rose 0.6% year-on-year to 18.15 million tons, according to data released by the National Bureau of Statistics on Monday.
Production since the beginning of the year reached 89.1 million tons, an increase of 1.8% over the previous year. National crude oil production fell by 1.8% in May from the same level a year ago to 60.52 million tons, bringing its total since the beginning of the year to 301.77 million tons, up 0.3% from last year.
The country's industrial output in May lagged behind expectations and the slowdown in the real estate sector showed no signs of abating, increasing pressure on Beijing to support growth.
The wave of data released on Monday was largely pessimistic, underscoring the difficult recovery of the world's second-largest economy.
On the geopolitical front, fears of a broader war in the Middle East persisted after the Israeli military said on Sunday that intense cross-border firing from Lebanese Hezbollah into Israel could lead to a dangerous escalation.
After relatively violent exchanges over the past week, Sunday witnessed a noticeable decrease in Hezbollah's fire, while the Israeli army said it had carried out several air strikes against the group in southern Lebanon.
Markets in Singapore, the main center for oil trading, and other countries in the region were closed for a public holiday on Monday.