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Oil prices dive over increasing worries about economic slowdown in key markets
(MENAFN) Oil prices experienced a decline on Friday, driven by increasing worries about an economic slowdown in key markets, particularly due to China's weakening demand and the possibility of heightened supply from OPEC+. As of 10:59 a.m. local time (0759 GMT), international benchmark Brent crude was priced at USD74.54 per barrel, down 0.45 percent from the previous session's close of USD74.88. Similarly, US benchmark West Texas Intermediate (WTI) also fell by 0.45 percent, settling at USD70.84 per barrel after finishing at USD71.16 the day before.
The downward trend in oil prices is largely attributed to signs of economic deceleration among major oil consumers. Market participants are closely monitoring indicators of slowing demand in China, which is the world's largest importer of crude oil, alongside expectations that the OPEC+ group may increase supply in response. In China, ongoing economic concerns have negatively impacted the demand outlook, as evidenced by lower-than-expected import data, raising fears of potential economic stagnation.
Moreover, China has experienced its first annual decline in oil imports since 2000, primarily due to reduced domestic demand and a notable rise in electric vehicle sales, suggesting a weakening appetite for oil among consumers. This trend adds to the cautious sentiment prevailing in Chinese markets, contributing to the downward pressure on global oil prices.
In addition to challenges in China, the US economy is also showing signs of strain, with recent data revealing that non-farm employment increased by 142,000 in August, while the manufacturing sector has been contracting for the past seven months. Despite these challenges and the anticipated decline in global demand, concerns about major oil producers potentially ramping up supply continue to influence market dynamics. OPEC and its allies, collectively known as OPEC+, previously decided to extend oil production cuts through November in response to falling crude oil and fuel prices.
The downward trend in oil prices is largely attributed to signs of economic deceleration among major oil consumers. Market participants are closely monitoring indicators of slowing demand in China, which is the world's largest importer of crude oil, alongside expectations that the OPEC+ group may increase supply in response. In China, ongoing economic concerns have negatively impacted the demand outlook, as evidenced by lower-than-expected import data, raising fears of potential economic stagnation.
Moreover, China has experienced its first annual decline in oil imports since 2000, primarily due to reduced domestic demand and a notable rise in electric vehicle sales, suggesting a weakening appetite for oil among consumers. This trend adds to the cautious sentiment prevailing in Chinese markets, contributing to the downward pressure on global oil prices.
In addition to challenges in China, the US economy is also showing signs of strain, with recent data revealing that non-farm employment increased by 142,000 in August, while the manufacturing sector has been contracting for the past seven months. Despite these challenges and the anticipated decline in global demand, concerns about major oil producers potentially ramping up supply continue to influence market dynamics. OPEC and its allies, collectively known as OPEC+, previously decided to extend oil production cuts through November in response to falling crude oil and fuel prices.
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