Energy investors were also awaiting clues about the U.S. Federal Reserve’s upcoming interest rate decision. | Photo: Bloomberg
Oil prices fell around 2 percent on Monday, with global benchmark Brent holding below $80 a barrel, on the prospect that successful Middle East peace talks could reduce supply risks, while economic weakness in top oil importer China looked set to dampen demand.
At 12:34 EDT (1634 GMT), Brent crude futures were down $1.59, or 2 percent, at $78.09 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down $1.71, or 2.2 percent, at $74.94.
“This market is under pressure because of expectations that they will continue to push through ceasefire negotiations,” said Bob Yawger, director of energy futures at Mizuho in New York.
U.S. Secretary of State Antony Blinken said Monday that Washington’s latest diplomatic push for a Gaza ceasefire deal was “probably the best, maybe the last chance” and implored all stakeholders to push the deal across the finish line.
Netanyahu’s office said the prime minister “reiterated Israel’s commitment to the latest American proposal regarding the release of our hostages, taking into account Israel’s security needs.”
China’s economic woes also put pressure on oil prices. Last week, data showed new home prices fell at the fastest pace in nine years. Chinese refiners sharply cut crude processing rates last month in response to weak fuel demand.
“We currently see long-term trends in global oil demand tilting lower, with a much softer-than-expected Chinese economic recovery providing the main impetus in this regard,” said Jim Ritterbusch of Ritterbusch and Associates in Florida.
Both benchmark crudes fell nearly 2 percent on Friday as investors tempered their expectations for Chinese demand growth, but ended the week broadly unchanged after U.S. data showed inflation was moderating despite solid retail spending.
“Persistent concerns about sluggish demand in China led to a sell-off,” said Hiroyuki Kikukawa, president of NS Trading, adding that the impending end of the peak driving season in the United States was another factor weighing on prices.
However, supply risks stemming from continued tensions in the Middle East and the escalation of the war between Russia and Ukraine are supporting the market, he said.
Energy investors were also awaiting clues about the US Federal Reserve’s upcoming interest rate decision.
A slim majority of economists polled by Reuters said they expected the Fed to cut interest rates by 25 basis points at each of its three remaining meetings this year, a larger reduction than expected last month, and that a recession was unlikely.
Rate cuts could boost economic activity in the world’s largest oil consumer.
(Reporting by Laila Kearney in New York, Paul Carsten and Alex Lawler in London, Yuka Obayashi in Tokyo and Colleen Howe in Beijing; Editing by David Goodman, Shounak Dasgupta, Jonathan Oatis and Barbara Lewis)
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 19, 2024 | 11:22 PM IS
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