On Monday, oil prices declined amid China’s demand jitters as investors focused on Middle East ceasefire negotiations, which could cut supply risks.
In the Asian afternoon session, Brent futures for October delivery eased by -0.69% to $79.13 per barrel. West Texas Intermediate futures for October contract plummeted by -0.75% to $74.97 a barrel.
According to reports, both crude benchmarks declined by -2.00% last Friday as traders reduced the outlook for a demand boost from China. However, last week’s string of US data highlighted cooling inflation and solid retail spending.
Meanwhile, analysts noted that worries continued sluggish Beijing demand, which led to a sell-off. Another contributing factor was the upcoming conclusion of the peak driving season in the United States.
Moreover, Middle East tensions and the escalation of the Russian-Ukraine dispute, which cause supply risks, are pressuring the market.
China revealed on Thursday that its economy had lost momentum last month, with new home costs declining at the fastest rate in nine years. Furthermore, reports show that industrial yields are slowing down, and unemployment data is increasing.
In addition, investors raised concerns over sluggish demand from Beijing, where refineries sharply reduced oil processing rates in July due to cooling crude demand.
OPEC and IEA Mixed Outlooks on Future Oil Demand
On Monday, OPEC and the IEA revealed a mixed forecast for oil demand strength over the next few months.
The Organization of the Petroleum Exporting Countries (OPEC) anticipates a robust demand for the rest of the year. However, the International Energy Agency (IEA) forecasts a decline, primarily due to the slow China imports.
Meanwhile, weekly US data revealed a decline of two in the number of active rigs in America last week.
Moreover, the IEA noted that global crude demand is set to rise by less than 1 million barrels (MB) per day this year. Meanwhile, OPEC expected a robust demand of 2.11 MB per day.
