Synopsis: Oil prices fell nearly 2% as China’s economic slowdown fueled concerns about weak demand. Brent crude dipped below $80 per barrel, while WTI also saw declines. Reduced demand expectations from China and revised forecasts from OPEC and IEA contributed to the decline.
Oil prices experienced a significant decline of nearly 2% on Friday, as investors grew increasingly concerned about weakening demand from China, the world’s largest oil importer. Brent crude futures dropped by $1.36, settling at $79.68 per barrel, while U.S. West Texas Intermediate (WTI) crude futures decreased by $1.51, closing at $76.65 per barrel.
This downward trend in oil prices comes on the heels of concerning economic data from China. The data revealed a noticeable slowdown in China’s economy for July, with new home prices falling at the fastest rate in nine years, industrial output slowing, and unemployment rates rising. These indicators have fueled fears that demand for oil in China is waning, as refineries in the country have sharply reduced their crude processing rates due to weak fuel demand.
Adding to the pressure on oil prices, both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) have revised their oil demand growth forecasts downward for the year. Both organizations cited softness in China's market as a key factor behind the reduced forecasts. This, coupled with hopes of potential interest rate cuts by the U.S. Federal Reserve, has led to a cautious outlook for global oil demand growth.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies. We advise investors to check with certified experts before making any investment decisions.
