Investing.com -- It’s another day in the red for oil as economic data in top importer China continues to disappoint while U.S. banking tensions resurfaced with a fresh plunge in the shares of troubled lender PacWest amid continued wrangling over the nation’s debt crisis.
New York-traded West Texas Intermediate, or WTI, crude was down $1.12, or 1.5%, to $71.44 per barrel by 13:00 ET (17:00 GMT). On Wednesday, WTI settled down 1.6%. Week-to-date though, the U.S. crude benchmark is up just about 0.1% after three prior weeks of losses totaling 13%.
London-traded Brent crude was down 94 cents, or 1.2%, to $75.47. On Wednesday, Brent settled down 1.3%. The global oil benchmark is still up around 0.3% on the week, after a net loss of 12% over three previous weeks.
Data out of Beijing showed Chinese consumer inflation barely grew in April, while producer inflation sank to its weakest level since the peak of the COVID-19 pandemic in 2020.
Thursday’s inflation reading, coupled with disappointing Chinese trade data earlier this week, showed an economy struggling to pick up despite stimulus measures after a post-COVID reopening.
The weak data on China prompted energy traders to somewhat shrug off the latest OPEC monthly report which had a slight upgrade with Chinese oil demand. China is now expected to require 800,000 barrels daily, up from the 760,000 forecast last month, the 13-member Saudi-led OPEC, or Organization of the Petroleum Exporting Countries, said.
On the U.S. banking front, shares of PacWest Bancorp (NASDAQ:PACW) plunged 24% on reports that its deposits dropped 9.5% last week.
“Wall Street is also still fixated with the regional banks” and stress in the sector “won’t be going away anytime soon as we await to see which banks put too much in long-dated Treasuries,” said Ed Moya, analyst at online trading platform OANDA.
The debt ceiling drama, which has seen the White House and its Republican rivals in Congress continue their standoff for a deal ahead of a potential U.S. default on its payments, will also “eventually play a larger driver for oil prices,” Moya said. But he added that the downside could be limited “as a lot of the bad news has been priced in.”