Oil prices dropped on Monday amid worries about an economic slowdown and the trade tension between the US and China, which have led to a cut in the growth outlook for oil demand.
At 02:50 GMT, International benchmark Brent crude futures were at $58.35 per barrel, down by 18%.
The US West Texas Intermediate (WTI) futures were at $54.29 a barrel, down by 21%.
According to a senior analyst at OANDA, oil prices are falling at the start of the trading week due to lower demand forecasts published last week and pessimism about the US-China trade deal.
The US-China trade tension took global equity markets by surprise last week, while the US crude reserve added to a downward pressure on oil prices, which made it lost around 20% from its 2019 peaks.
Moreover, the escalating signs of a potential economic slowdown and a decline in the trade row have caused global oil demand to grow at its slowest pace since the financial crisis of 2008, according to the International Energy Agency (IEA).
The Paris-based agency cut its 2019 and 2020 global oil demand growth forecast to 1.1 million and 1.3 million barrels per day (BPD), respectively.
Elsewhere, Russia's oil production rose to 11.32 million BPD on August 1-8, up from 11.15 million BPD on average in July.
In July, the OPEC countries and its allies including Russia agreed to extend their supply cuts until March 2020 to prop up oil prices.
Bitcoin Goes Up
The price of Bitcoin went up during early morning trades on Monday.
Bitcoin inched up 0.1% to $11,409.8 while Ethereum gained 1.1% to $212.66. Similarly, XRP traded 1.0% to $0.30274 and Litecoin jumped 2.4% to $88.630.
According to Cointelegraph, China’s central bank’s deputy director Mu Changchun said that a new digital currency using pure blockchain architecture has now been successfully developed after five years of research.
The unnamed new coin will adopt a “two-tier operating system” to cater to China’s “complex economy with a vast territory and a large population,” Mu said, noting that the central bank will be operating on the upper level, while commercials bank will be on the secondary level.
According to the PBPC executive, the digital currency will be useful for “small-scale retail high-frequency business scenarios.”
Major cryptocurrency prices gained last week, as some analysts have suggested that bitcoin is set to capitalize on the flight-to-safety trade as U.S. President Donald Trump and Beijing look set to deepen their trade rift.
On Monday, Trump said he is “not ready to make a deal” with China and that it would be “fine” if Chinese negotiators call off the scheduled meeting between the two sides next month.
Gold Prices Remain Flat
Gold prices were little changed on Monday as equities gained despite the US-China trade tensions.
Asian stocks are trading mostly in the green even after the US President, Donald Trump said that he is not ready to make a trade deal with China.
Gold Futures traded on the Comex division of the New York Mercantile Exchange were little changed at $1,508.15.
Gold prices ended higher last week after a week of easing by global central banks to shield their economies from the yuan devaluation. Moreover, the Reserve Bank of New Zealand surprised markets with a 0.5% cut last week.
For the coming week, gold traders will be looking for signs of the US Federal Reserve and other central banks engaging in deeper rate cuts to blunt the impact of the growing trade war.
On the data front, the US inflation data due on Tuesday and China’s July industrial production and retail sales are also expected to be in focus later this week.
If the data in these regions remain flat, we can then expect to see the price of gold to fall.