Oil prices had been rallying overnight on Chinese trade talk hopes but a drop in German factory orders and reports that China is looking to strike back at the U.S. over its Chinese tech list raised more concerns about oil demand.
he oil market is fixated on macro-economic issues and not necessarily current supply or demand. The weak ISM service sector number added to oil demand fears even as data showed the global oil demand growth in August.
While the oil futures market failed to focus on the bullish aspects of the report because of the worries about a global manufacturing slowdown, the truth is that a slowdown in petroleum demand is not showing up in U.S. data.
Oil prices got crushed at an end of the quarter, holiday-thinned market. Weak global manufacturing numbers, as well as claims by Saudi Aramco that production is restored, found the oil market lacking a bid.