Oil prices declined on Tuesday, extending losses as worries over demand from China, the world’s largest crude importer, overshadowed easing concerns about escalating tensions in the Middle East.
Brent crude futures dropped 40 cents to $79.38 per barrel by 0640 GMT, marking a 0.5% decrease. Meanwhile, U.S. crude futures fell 43 cents to $75.38 per barrel, a 0.6% decline.
According to a Reuters poll released on Monday, market sentiment was influenced by a series of disappointing economic reports from China, including indications that manufacturing activity may have contracted for the third consecutive month in July.
Citi revised China’s growth forecast from 5% to 4.8% following lower-than-expected second-quarter growth figures, citing continued economic softening throughout July.
Emril Jamil, senior analyst at LSEG Oil Research, expressed concern over the market’s short-term outlook, citing persistent weak domestic demand from China and the potential for increased oil production by some OPEC+ members in the fourth quarter.
Jamil added, “Tariff tensions with Europe and the U.S. will also influence Chinese crude demand going forward.”
Investors are now focused on an upcoming meeting of China’s top decision-making body, the Politburo, which is expected later this week and could provide insights into additional economic policy measures.
However, expectations remain muted after a recent critical policy meeting in mid-July offered limited new initiatives to bolster market confidence.
