By Anadolu Agency
August 22, 2023 8:08 amOil prices posted limited decreases on Tuesday over demand worries triggered by fears of a slowdown in China’s economic growth and expectations of further interest rate hikes in the US.
International benchmark Brent crude traded at $84.36 per barrel at 10.16 a.m. local time (0716 GMT), a 0.12% fall from the closing price on Monday of $84.46 per barrel.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $80.06 per barrel, down 0.07% from the previous session close of $80.12 per barrel.
Tight global supply concerns, after output curbs from OPEC+ countries, Saudi Arabia and Russia, have kept oil prices trading close to their highest levels this year.
However, demand worries triggered by fears of a slowdown in economic growth in China and expectations of further interest rate hikes in the US dampened sentiment.
The prospect of softer Chinese demand after a disappointing interest rate cut is putting pressure on oil prices.
Last month, China’s producer pricing index (PPI) fell by 0.3% while the consumer price index (CPI) fell by 4.4%; both fell simultaneously for the first time since 2020, triggering deflation concerns.
On Monday, the People’s Bank of China (PBOC) lowered its one-year loan prime rate to 3.45% from 3.55%, but left its five-year rate unchanged.
Meanwhile, the possibility of further rate hikes in the US is also underpinning the decline in oil prices.
While markets await more signals on the US Federal Reserve’s (Fed) monetary policy, investors fear that higher US rates could potentially hurt oil demand in the world’s largest oil consumer.
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