The global oil market is experiencing a mixed sentiment due to multiple factors that are impacting prices. On one hand, concerns over China's economic outlook and recent data indicating a contraction in manufacturing have dominated sentiment. On the other hand, tourism and travel activity in the country soared on the first day of the Labor Day holiday, potentially signaling increased demand for fuels.
Meanwhile, in the US, JPMorgan Chase & Co. agreed to acquire First Republic Inc., the latest lender to fail. While this deal could help stabilize the financial system, concerns remain over the fate of other weak banks in the country.
The oil market has seen a decline of over 5% this year, despite the efforts of the Organization of Petroleum Exporting Countries and its allies to cut supply from this week. The darkening economic outlook, with central banks such as the Federal Reserve continuing to raise rates, has further spurred losses. The Fed is expected to deliver another hike this week, which could potentially be the last rise in the current cycle.
The slump in manufacturing data from China has further pressured crude prices, along with concerns over banking stability in the US. While the situation remains uncertain, it is clear that the global oil market will continue to be impacted by a variety of factors in the months to come.
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