As oil prices fell to 2.2% this week, U.S. crude oil futures experienced its first loss in five weeks. In electronic trade, the commodity lost 9 cents, putting the price to USD 105.40 a gallon. While this was a mere 0.1% loss, the fall almost disregarded Thursday's rise when it was trading at 10 cents a gallon. The loss was precipitated by concerns of China's economy slowing as figures from HSBC showed decreased manufacturing activity in the country.
In July, manufacturing in China fell to a low for the first time in 11 months. An Analyst from Commerzbank had earlier written about how the country is integral to the worldwide demand for oil. "China has been and remains the key driver of global oil demand, the dynamism of which has this year been lagging considerably behind the expansion of supply," analyst Eugen Weinberg wrote. If the Chinese economy continues to weaken, Weinberg said that this will propel continued oversupply, which will continue to put pressure on oil prices.
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