LONDON: Oil prices slumped more than five per cent on Monday on the rising prospects of a return of Iranian oil to the market and data showing China’s economic recovery stuttering under Covid-19 restrictions.

Stock markets were broadly steady and the dollar traded mixed as investors welcomed signs of cooling US inflation, which nevertheless remains at the highest level in decades.

“The dark clouds of recession appear to be appearing when it comes to the global economy, with the latest China data reinforcing those fears,” said market analyst Michael Hewson at CMC Markets UK.

China’s central bank slashed key interest rates in a surprise move Monday as a raft of data showed weakness in the world’s second-largest economy.

Industrial production was up 3.8pc year-on-year, but down from 3.9pc in June and well below analysts’ forecasts.

Meanwhile, Iran’s foreign minister said Tehran would deliver its “final” proposal later Monday on talks to revive its 2015 nuclear accord with world powers, after Washington had accepted key demands.

A deal would mean that Iran’s crude output of 2.5 million barrels per day would no longer be under international sanctions and help relieve supply constraints that have been pushing up prices.

Brent crude futures fell $4.35, or 4.43pc, to $93.80 a barrel by 1351 GMT after settling 1.5pc lower on Friday.

US West Texas Intermediate crude was down $4.23, or 4.59pc, at $87.86 after dropping 2.4% in the previous session.

Published in Dawn, August 16th, 2022