Oil prices fell on Monday as China’s weaker-than-expected economic growth projected a sluggish economic revival in the world’s top crude oil importer, raising concerns over its oil demand.
International benchmark Brent crude traded at $78.94 per barrel at 10.05 a.m. local time (0639 GMT), a 1.16% loss from the closing price of $79.87 a barrel in the previous trading session on Friday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $75.32 per barrel, down 1.38% from the previous session’s close of $74.28 per barrel.
According to China’s National Bureau of Statistics, the country’s economy expanded by 6.3% in the second quarter from a year earlier, falling short of predictions of 6.9%.
Although China’s gross domestic product surpassed the 4.5% rise in the first quarter, the data overshadowed hopes of recovering demand to put downward pressure on prices.
Oil prices posted a limited increase of 4% last week over fears of tight supply driven by Saudi output cuts, and hopes of increased demand in the world’s largest oil consumer, the US.
Investors are awaiting the Federal Open Market Committee (FOMC) meeting on July 25–26 with hopes that the US Federal Reserve (Fed) will soon hit the brakes on interest rate hikes.
Although data released last week suggested that inflation was moderating, Fed Governor Christopher Waller said on Thursday that he was not ready to declare an end to rate hikes this year.
Despite the recent rise in the dollar index, the greenback remains lower than it was in July, encouraging trading with foreign currency holders because oil is cheaper.
