Crude oil prices fell to kick off August, putting the commodity on track for a third monthly loss, assuming the nearly 5% drop on Monday is a sign of what’s to come. China’s National Bureau of Statistics (NBS) reported a surprise contraction via its manufacturing purchasing managers’ index (PMI). The factory activity gauge fell from 50.2 in June to 49.0 in July. That was well below the 50.4 consensus forecast.
Brent crude—the global benchmark—held up slightly better but still fell nearly 4%, and prices are tracking lower through early Asia-Pacific trading. China’s adherence to its “Zero-Covid” policy is putting severe strain on the country’s manufacturing activity. That policy will likely continue weighing on the country’s economy.