NEW YORK, Aug. 4 (UPI) — Crude oil prices recovered Tuesday from a weak opening to August as China pursued market stabilization, though sluggishness continues in the European economy.
Major crude oil indices suffered heavy losses Monday, coming off the worst monthly oil market performance for July since 2008. Markets rebounded Tuesday with Brent up 1.7 percent to $50.37 per barrel just before the opening bell on Wall St. The price for West Texas Intermediate, the U.S. benchmark for crude oil, gained nearly 2 percent to $46.05 per barrel.
July’s declines were triggered in part by broad concerns about the pace of the global economic recovery. Greek debt woes threatened to burden the European economy, while two July crashes on the Chinese stock exchange sparked concerns about the trajectory of one of the world’s leading economies.
Greek debt was among the issues behind the last fiscal crisis. While European leaders said the regional economy could weather the storm, Eurostat, the statistical office for the European Union, said Tuesday industrial producer prices for June were 0.1 percent below May levels and 2.2 percent lower year-on-year.
The Shanghai Composite Index, meanwhile, ended a three-day skid to gain 3.7 percent at the close of trading Tuesday. The rally was sparked by new rules aimed at prohibiting investors from borrowing against short sales on the same trading day.
Scores of accounts were frozen in the Chinese market amid concerns of irregular trading activity.
Tuesday’s rally may be short lived as the oversupply and weak demand environment persists. In a quarterly report released last week, Royal Dutch Shell said the downturn in the crude oil market “could last several years.”