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Brent crude futures dipped 53 cents to $85.68 per barrel by 1008
GMT. U.S. West Texas Intermediate crude slipped 66 cents to
$81.85 a barrel.
Supply cuts by Saudi Arabia and Russia, part of the OPEC+ group
comprising the Organization of the Petroleum Exporting Countries
and allies, had helped galvanise a rally in prices over the past
seven weeks.
China's industrial output and retail sales data on Tuesday
showed the economy slowed further last month, intensifying
pressure on already faltering growth and prompting authorities
to cut key policy rates to shore up activity.
"When the oil market appears to be comfortable in rally of late,
it is often the case that China is the number one fire douser,
throwing a wet blanket over those dreaming for heady
($)90-handle crude and beyond," said John Evans of oil broker
PVM.
In an effort to shore up support, the People's Bank of China (PBOC)
lowered the rate on 401 billion yuan ($55.3 billion) in one-year
medium-term lending facility (MLF) loans to some financial
institutions by 15 basis points to 2.5%.
"The market was expecting the PBOC to wait until September
before easing again, and today's cuts suggest that the
authorities' concern about the state of the macroeconomy is
mounting," said Robert Carnell, Asia Pacific head of research
for ING Bank.
On a brighter note, refinery throughput in July at the world's
biggest oil importer rose 17.4% from a year earlier, as refiners
kept output elevated to meet demand for domestic summer travel
and to cash in on high regional profit margins by exporting
fuel.
Still, sentiment on China is souring, added PVM's Evans.
"Markets are...becoming bored of the tepid stimulus shown so far
from officials who think if they keep talking big and delivering
small repeatedly, investors will believe them."
(Reporting by Natalie Grover; Additional reporting by Muyu Xu
and Katya Golubkova; editing by Tom Hogue and Jason Neely)
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