Oil prices fall amid weak demand concerns, Middle East tensions
Date
8/19/2024 9:02:57 AM
(MENAFN) Oil prices experienced a decline in early Asian trading on Monday, driven by concerns over diminishing demand in China, the world's largest oil importer. As of 00:32 GMT, brent crude futures were down by 13 cents, or 0.2 percent, trading at USD79.55 per barrel, while West Texas Intermediate (WTI) crude futures also fell by 13 cents, or 0.2 percent, to USD76.52 per barrel. This decline follows a roughly 2 percent drop on Friday, as investors adjusted their expectations regarding demand growth from China. Despite this, the prices ended the week relatively stable compared to the previous week, supported by recent U.S. data indicating slower inflation and strong retail spending.
The drop in oil prices is partly attributed to ongoing concerns about weakening demand in China. Data released on Thursday revealed a slowdown in China's economy for July, with new home prices falling at their fastest rate in nine years, a slowdown in industrial production, and rising unemployment. These factors have heightened fears of reduced demand from China, where refineries had already sharply cut crude processing rates last month due to weak fuel demand. Additionally, the approaching end of the peak summer driving season in the U.S. has contributed to the market's downward trend.
Amidst these concerns, investors are also closely monitoring developments in the Middle East, where tensions and potential supply risks persist. U.S. Secretary of State Antony Blinken's recent visit to Israel aimed to advance ceasefire negotiations in Gaza. However, Hamas has expressed skepticism about the mission, accusing Israel of undermining the ceasefire efforts. The mediating parties—Qatar, the U.S., and Egypt—have yet to reconcile their differences sufficiently to reach an agreement, and violence in Gaza continued unabated on Sunday.
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