Crude Oil Prices Flat on July 31 as Weak Chinese Data Offsets Supply Concerns

On July 31, crude oil prices erased early gains and traded flat in Asian markets as disappointing economic data from China raised fresh doubts over global demand, dampening optimism over tighter supply conditions driven by U.S. sanctions on Russia.

Adding to the downward pressure, a strengthening U.S. dollar weighed on oil markets. The dollar rallied on Wednesday after the Federal Reserve held interest rates steady and gave little indication of when it might begin cutting them.

As of 21:34 ET (01:34 GMT), Brent crude futures for September hovered at $73.26 per barrel, while West Texas Intermediate (WTI) crude edged up to $70.10. Both benchmarks initially rose by as much as 0.3% before paring gains. At 09:05 AM IST, Brent crude futures were trading down 0.19% to $73.10.

Crude prices had climbed for 3 consecutive sessions, buoyed by expectations of tighter global supply. The rally was largely driven by geopolitical tensions, after former U.S. President Donald Trump threatened harsh tariffs on countries purchasing Russian oil.

Weak Chinese PMI Data Sparks Demand Fears

The pullback in oil was triggered by the release of disappointing purchasing managers index (PMI) figures from China for July. The country’s manufacturing sector contracted more than expected, hit by extreme weather events and ongoing trade tensions with the U.S.

Non-manufacturing activity also underperformed, with overall business sentiment showing only marginal growth. The latest data intensified concerns about a slowdown in the world’s largest oil importer, potentially dampening its demand for crude.

The weak PMI readings suggested that earlier support from Beijing’s stimulus efforts may be losing steam. In response, China’s Politburo has indicated plans to introduce additional stimulus measures in the months ahead.

Also Read: Gift Nifty Signals Gap-Down Opening on July 31; Trump Targets Indian Imports with 25% Tariff

Trump Escalates Pressure on Russian Oil Buyers

This week’s earlier gains in oil were largely fueled by Trump's renewed rhetoric against Russia. In a bid to pressure Moscow over its ongoing war in Ukraine, Trump threatened to levy steep secondary tariffs, up to 100%, on major importers of Russian crude, including China and India.

In a separate move, Trump announced that Indian exports to the U.S. will face a 25% tariff starting August 1, citing the country’s continued energy dealings with Russia. He also issued warnings to China against importing Russian oil.

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