Tuesday’s decline in oil prices followed those of the previous session as investors discounted the possibility of rising hostilities in the Middle East and expressed concerns about demand in China, the world’s largest importer of crude oil.
By 8:40 a.m. Saudi time, Brent crude oil futures had dropped by 40 cents, or 0.5 percent, to $79.38 per barrel. At $75.38 a barrel, US oil futures were down 43 cents, or 0.6 percent.
Recent days have seen a flurry of depressing economic news from China that has rattled markets. July saw a third month of expected declines in the nation’s manufacturing activity, according to a Reuters poll released on Monday.
Additionally on Monday, Citi lowered its growth prediction for China from 5% to 4.8% after the nation’s GDP in the second quarter fell short of analyst projections and the country’s economy continued to weaken in July.
Senior analyst at LSEG Oil Research Emril Jamil stated, “We believe the market has a stronger downside bias in the short term, weighed by continuing slack domestic demand from China, as well as potential output restoration by some OPEC+ members in Q4”.
According to Jamil, “China’s future demand for crude oil will also be impacted by tariff tensions with the US and Europe.”
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