Oil slumps 4%, dollar backs off two-week high

Oil futures tumbled in American trade, while the dollar index backed off June 29 highs, following earlier data from China, the world's largest energy importer, and the US, the world's biggest consumer. 

As of 04:53 GMT, US crude futures due on August 15 plunged 4.20% to $68.03 a barrel from the opening of $71.01, marking three-week lows, while Brent September 15 futures shed 4.22% to $72.15 a barrel from the opening of $75.33, marking three-month lows, as the dollar index slipped 0.08% to 94.60 from the opening of 94.68. 

Earlier Chinese data showed second quarter GDP growth up to 1.8% from 1.4% in the first quarter, beating estimates of 1.5%, while slowing down to 6.7% on a yearly basis as expected from 6.8%. 

Chinese unemployment rates settled at 4.8% with no change from May, while retail sales rose 9.0% y/y, up from 8.5% and beating forecasts of 8.8%, as industrial output rose 6.0%, slowing down from 6.8%, and missing estimates of 6.5%. 

US Data 

Earlier US data showed retail sales rose 0.5%, slowing down from 1.3% in May, and beating estimates of 0.4%, while core sales rose 0.4% as expected, also slowing down from 1.4% in May. 

The Empire State Manufacturing Index slipped to 22.6 from 25.0 in June, beating expectations of 20.3, while wholesale inventories rose 0.4% as expected, adding to a 0.3% increase in April. 

Trump Looks to Cut Prices, Global Output Increases 

Concerns over supply shortages were alleviated recently, with Libyan production returning back online, while Saudi Arabia is reportedly sending additional shipments to Asian and the US. 

Reports also came out of US President Donald Trump's consideration to use emergency oil supplies in the US to cut prices, weighing heavily on oil futures today, with US crude slumping below $70 to June 26 lows, while Brent plumbed April 18 lows. 

Russian energy minister Alexander Novak said Russia and other producers stand ready to raise output by one million bpd in case supply shortages occurred. 

US Oil Rig Count 

Baker Hughes reported no change in the US oil rig count last week at 863 rigs, already the highest since March 2015. 

US production has jumped 29% from mid-2016 levels to a total of 10.9 million bpd, a record high, passing Saudi Arabia's 10.7 million bpd, and nearing Russia's 11.1 million bpd.