Oil prices dip on China demand concerns, set for weekly loss
2024.07.19 01:25
Investing.com– Oil prices fell in Asian trade on Friday, and were headed for a weekly loss amid persistent concerns over slowing demand in top importer China, while sentiment was also dented by concerns over trade ructions with the U.S.
While crude prices saw some gains on Thursday, as shrinking U.S. inventories drove optimism over tighter markets, they were still headed for a weekly loss after disappointing Chinese economic data earlier this week.
expiring in September fell 0.5% to $84.73 a barrel, while fell 0.6% to $80.79 a barrel by 00:26 ET (04:26 GMT).
Both contracts were down between 0.2% and 0.6% this week.
China demand concerns weigh amid few stimulus signals
Concerns over sluggish demand in the world’s biggest oil importer remained front and center, following softer-than-expected growth figures for the second quarter.
The readings came after data last week showed a decline in China’s oil imports in June.
Weak readings on the Chinese economy also came as the Third Plenum of the Chinese Communist Party, which began earlier in the week, yielded scant cues on plans for any more stimulus measures.
Sentiment towards China was further dented by reports earlier this week suggesting that the U.S. was planning stricter trade restrictions on the country’s technology sector- a move that stands to attract retaliatory measures from Beijing. Speculation over a Donald Trump presidency also further soured sentiment towards China, given that Trump has maintained largely protectionist policies.
Trump also said that he will push for increasing U.S. oil production- a move that could herald higher supply in the coming years.
Tighter markets, rate cut hopes offer oil some support
But expectations of tighter oil markets in the near-term offered crude some support. U.S. shrank for a third straight week as travel and fuel demand picked up in the summer months.
The prospect of interest rate rate cuts by the Federal Reserve also buoyed crude, given that such a scenario presents better conditions for economic growth and oil demand.
Outside the U.S., continued geopolitical ructions between Hamas and Israel, coupled with Houthi aggression in the Red Sea, kept some risk premia priced into oil markets.
