After climbing by 13% in July, oil prices were dragged lower on the first day of August by further disappointing economic data out of China. Oil bulls thoroughly enjoyed the 13% month-on-month increase in oil prices in July, but the first day of August provided another head-scratcher as Chinese manufacturing contracted in July with the PMI index dropping to 49.2. Perceived as a positive sign for metals markets that expect Beijing to splash the cash on stimulus, Chinese woes have nevertheless halted the rise in oil prices, sending ICE Brent below $85 per barrel. However, should Saudi Arabia extend its 1 million b/d production cut, there might be a new bullish narrative to counter the year-long Chinese blues. US national gasoline prices gained 16 cents per US gallon last week, hitting $3.75/USG on Monday, as heat-related refinery outages curbed product supply and robust countrywide demand lowered gasoline stocks to their lowest July level since 2015. NN: Gasoline inventories are suppose to drop this time of year. From a refinery stand point summer gasoline build is over. They switch to heating oil and a different formula winter gasoline. China demand is leveling off still at record imports. One interesting event i am monitoring is the big drop in import into India. they went ballistic on the Russia Urals oil price increase.