Oil rates decline on Monday amid concerns over weaker demand from China
Date
8/20/2024 9:02:39 AM
(MENAFN) On Monday, oil prices experienced a decline amid concerns over weaker demand from China, the world's largest oil importer, and ongoing cease-fire negotiations in the Middle East. The international benchmark brent crude saw a drop of 0.4 percent, trading at USD79.34 per barrel at 10:31 a.m. local time (07:31 GMT), down from the previous session's close of USD79.68. Similarly, the US benchmark West Texas Intermediate (WTI) decreased by 0.5 percent, settling at USD75.20 per barrel, after ending the prior session at USD75.54.
The decline in oil prices was primarily driven by lower economic growth expectations for China, which raised concerns about a potential drop in oil demand. Recent data revealed that new home prices in China fell at the fastest rate in nine years, industrial production growth slowed, and the unemployment rate rose to 5.2 percent in July. These factors collectively indicate a slowdown in China's economic momentum, contributing to reduced demand projections for oil.
In addition to economic factors, the ongoing efforts to negotiate a cease-fire in the Middle East also influenced the fall in oil prices. The Middle East, home to a significant portion of the world's oil reserves, has seen heightened tensions, which have historically led to concerns about oil supply disruptions. The possibility of a cease-fire agreement, which would ease such supply concerns, contributed to the drop in oil prices.
US Secretary of State Antony Blinken arrived in Israel on Sunday evening to push forward negotiations aimed at securing a cease-fire and prisoner swap deal between Israel and Hamas. US President Joe Biden expressed optimism on Sunday, stating that he still believes a cease-fire in the Gaza Strip is achievable. Despite a lack of breakthrough in cease-fire talks in Doha, Qatar, on Friday, the US has presented a new proposal intended to address key issues and expedite a potential agreement.
MENAFN20082024000045015839ID1108580081
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.