Investing.com– Oil prices fell sharply Friday after a series of weak indicators from China reignited concerns about demand growth from the world’s top importer.
At 08:10 ET (12:10 GMT), fell 2.2% to $79.25 a barrel, while fell 2.6% to $76.17 a barrel.
China concerns, demand fears persist
China remains a key point of concern for oil markets, as economic activity in the world’s biggest oil importer has showed little signs of improving.
The country’s oil imports fell for a second consecutive month in July, while a slew of economic readings for the month read mostly negative.
Additionally, China’s diesel demand fell by 11% year over year to 3.9 million barrels per day in June, the biggest percentage drop since July 2021, the U.S. Energy Information Administration said on Thursday.
Concerns over China saw both the and the downgrade their forecasts for oil demand growth in 2024, with the two citing policy uncertainty in the country and persistent weakness in its economy.
Oil set for losing week
These renewed concerns over the Chinese economy has overshadowed the more positive tone seen earlier in the week on the back of some reasonably healthy U.S. economic readings and signs of easing inflation in the country.
grew more than expected in July, spurring hopes that the U.S. consumer remained resilient and presenting a positive outlook for fuel demand in the country.
Additionally, signs of cooling inflation furthered conviction that the Federal Reserve will cut interest rates in September.
The fell after the softer inflation data, further supporting oil prices, while the prospect of lower rates presented a positive outlook for crude demand.
However, the crude benchmarks were still on course for losing weeks, not helped by an unexpected build in U.S. inventories, which suggested that demand was cooling as the travel-heavy summer season came to a close.
Both contracts were trading around 1% lower as far as the whole week is concerned.
Middle East tensions remain in focus
Continued caution over an Iranian strike against Israel kept traders attaching a risk premium to crude, after Hezbollah and Hamas were seen launching strikes against the country earlier this week.
That said, a fresh round of negotiations to secure a ceasefire in the Gaza war have begun, even as Israeli troops continued 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.)