Investing.com — Oil prices fell sharply on Friday as a series of weak indicators from China reignited concerns about demand growth from the world’s largest importer.
At 08:10 ET (12:10 GMT), the stock was down 2.2% at $79.25 per barrel, while the stock was down 2.6% at $76.17 per barrel.
China is concerned and fears about demand persist
China remains a major concern for oil markets as economic activity in the world’s largest oil importer shows little sign of improvement.
The country’s oil imports fell for the second straight month in July, while a slew of economic data for the month were mostly negative.
In addition, China’s diesel demand fell 11% year-on-year to 3.9 million barrels per day in June, the biggest percentage decline since July 2021, the U.S. Energy Information Administration said Thursday.
Concerns about China have prompted both downward revisions to oil demand growth forecasts through 2024, with the two citing policy uncertainty in the country and continued weakness in the economy.
Oil ready for losing week
These renewed concerns about the Chinese economy have overshadowed the more positive tone from earlier this week, thanks to some reasonably healthy US economic data and signs of easing inflation in the country.
grew more than expected in July, raising hopes that U.S. consumers remained resilient and providing a positive outlook for fuel demand in the country.
In addition, signs of cooling inflation strengthened the belief that the Federal Reserve will cut rates in September.
The decline followed softer inflation data, which further supported oil prices, while the prospect of lower interest rates provided a positive outlook for crude demand.
However, crude benchmarks were still on track to lose weeks, not helped by an unexpected surge in U.S. inventories, which suggested demand was cooling as the travel-heavy summer season drew to a close.
Both contracts traded about 1% lower for the week.
Tensions in the Middle East continue to draw attention
Continued caution over an Iranian attack on Israel led traders to put a risk premium on crude oil after Hezbollah and Hamas launched attacks against the country earlier this week.
That said, a new round of negotiations has begun to secure a ceasefire in the Gaza war, even as Israeli forces continue their assault on the Palestinian enclave.
The talks, which have been boycotted by Hamas, have resumed in the Qatari capital Doha.
(Ambar Warrick contributed to this item.)
