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16/07/24
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Crude Prices Inch Down on Chinese Demand Concerns
On Tuesday, crude prices dropped on concerns of an easing Chinese economy hampering demand and despite growing estimates the U.S. Federal Reserve may start reducing its key interest in September.
Brent futures were 82 cents, or 1% lower at $84.03 per barrel, while U.S. West Texas Intermediate (WTI) crude was 94 cents, or 1.1% lower at $80.97 per barrel.
Official data showed that in April-June, the second-biggest economy in the world grew 4.7%, the slowest pace since Q1 of last year and missing a forecast of 5.1% in a Reuters poll. It slowed from the prior quarter’s expansion of 5.3%, hampered by job insecurity and an extended property downturn.
On Tuesday, the International Monetary Fund said the global economy is on track for slight growth during the next two years amid activity in the U.S. cooling, a bottoming-out in Europe, and stronger exports and consumption for China.
On Monday, Fed Chair Jerome Powell said the 3 U.S. inflation readings over Q2 of 2024 increased confidence somewhat that the rate of price increases was returning to the target of the central bank in a sustainable way. Market participants interpreted these remarks as meaning that a turn to interest rate cuts may come soon.
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