The price of oil fell to start of the week as industrial output in China slows, raising concerns
about global demand.
The price of West Texas Intermediate (WTI) crude oil, the U.S. standard, fell to $88 U.S. a
barrel, a decline of 4.3%, after China cut its key interest rates in the wake of an economic
slowdown.
China’s oil demand in July was down 10% from a year ago, while oil refining in the country also
fell in July as plants shutdown for annual maintenance.
Additionally, a nuclear deal with Iran looks increasingly likely, raising the prospect of new
supplies of Iranian oil hitting the global market in coming weeks.
Brent crude oil, the international benchmark, fell 4% to trade at $94.21 U.S. a barrel.
Crude oil prices have moved lower over the past couple of months on concerns about a global
economic slowdown, giving up much of the gains following Russia’s invasion of Ukraine this
past February.
However, the price of oil is still up 20% this year and the surge in energy prices over the first six
months has underpinned record earnings for oil and natural gas producers.
The International Energy Agency last week raised its forecast for global demand growth this
year, while OPEC said it expects the market to move into a surplus this quarter, and lowered its
forecast for the amount of crude oil it will need to produce in coming months.
