By Adedapo Adesanya
The Brent crude oil grade drowned by $1.36 or 1.7 per cent on Friday to $79.68 per barrel as the US West Texas Intermediate (WTI) crude benchmark sank by $1.51, or 1.9 per cent to $76.65 per barrel amid ease in investors’ expectations over demand growth from top oil importer, China.
Data from China showed its economy lost momentum in July, with new home prices falling at the fastest pace in nine years, industrial output slowing and unemployment rising.
That has fed worries about a slump in demand from the top oil importer, where refineries sharply cut crude processing rates last month on tepid fuel demand.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) on Monday cut its forecast for this year’s oil demand growth, citing softness in China. Also, the Paris-based International Energy Agency (IEA) cited weak demand in China when it slashed its 2025 forecasts on Tuesday.
During the week, fears of supply disruptions from a wider Middle East war and slowing growth in China forced revisions of demand forecasts and made oil prices volatile.
Prices rallied at the start of the week as traders braced for retaliation by Iran against Israel over the slaying of a Hamas leader in Tehran last month but some of that risk was priced out because Iran has not struck yet.
Analysts warn that any escalation could threaten key oil transit routes, putting over 20 million barrels per day at risk.
A fresh round of Gaza ceasefire talks began on Thursday in Qatar. It has been paused until next week, with involved parties sending mixed signals on progress.
Also, a string of data releases from the US kept a floor under oil prices with retail sales beating analysts’ expectations, and fewer Americans filed new jobless claims last week, sparking renewed optimism around economic growth in the biggest oil market.
Oil prices could lack direction until the US Federal Reserve decides whether to cut interest rates at its September meeting after inflation dropped to the target range.