Oil prices fall slightly at the beginning of the Asian trading session on Monday. Concerns over weaker demand from China, the world's top oil importer, continue to weigh on market sentiment. Meanwhile, investors are closely monitoring the ongoing ceasefire talks in the Middle East, which could potentially reduce supply risks.
Brent crude futures fell by 13 cents, or 0.2%, reaching $79.55 per barrel. Similarly, U.S. West Texas Intermediate crude futures decreased by 13 cents, or 0.2%, to $76.52 per barrel. These declines follow a nearly 2% drop last Friday, largely driven by tempered expectations of demand growth from China. Despite this, oil prices remained relatively stable over the week due to data from the U.S. showing moderated inflation and strong retail spending.
Persistent concerns regarding slow demand in China are leading to a sell-off in oil markets. China’s economic data for July revealed a significant slowdown, with new home prices falling at the fastest rate in nine years, industrial output decelerating, and unemployment rising. These factors have stoked fears among traders about a slump in demand from China. Last month, Chinese refineries sharply cut crude processing rates due to tepid fuel demand.
While concerns over China’s demand are pulling oil prices fall, tensions in the Middle East and the ongoing Russian-Ukraine conflict are underpinning the market. The potential for supply disruptions due to these geopolitical issues remains high. On Sunday, U.S. Secretary of State Antony Blinken arrived in Tel Aviv to push for a ceasefire in Gaza, but the efforts were complicated by accusations from Hamas that Israel was undermining the mission. The ongoing violence and failed negotiations continue to pose a risk to oil supplies, contributing to market uncertainty.
Stay updated on the latest shifts in the global oil market and what they mean for you by visiting our partner website: https://www.dailyfx.com/crude-oil
Oil prices fall as concerns over China's demand and tensions in the Middle East weigh on market sentiment.
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