Oil set for third weekly decline on China demand concerns

By Georgina McCartney, Alex Lawler and Arunima Kumar

LONDON (Reuters) -Oil prices slipped on Friday and were on track for a third consecutive weekly decline, pressured by muted demand in China and hopes of a Gaza ceasefire deal that could ease Middle East tensions and accompanying supply concerns.

Brent crude futures for September dipped 84 cents or 1.02% to $81.53 a barrel by 1320 GMT. U.S. West Texas Intermediate crude for September fell 78 cents, or 1% to $77.50.

For the week, Brent is trading down over 1% while WTI is down more than 2%.

Recent data, such as July 20 figures showing that China's total fuel oil imports dropped 11% in the first half of 2024, have raised concern about the wider demand outlook in China.

"Macro issues, including China, are weighing down on prices," said PVM oil analyst Tamas Varga. "It seems that the whole commodity sector is under pressure because of economic headwinds in China."

Concerns about the state of the Chinese economy, the world's top crude importer, remain elevated and could intensify if the Chinese PMIs next week continue to paint a blurry picture, said Charalampos Pissouros, senior investment analyst at brokerage XM.

In the Middle East, hopes of a ceasefire in Gaza have been gaining momentum.



A ceasefire has been the subject of negotiations for months, but U.S. officials believe the parties are closer than ever to an agreement for a six-week ceasefire in exchange for the release by Hamas of female, sick, elderly and wounded hostages.

Oil price declines were capped, however, by threats to production from Canadian wildfires, a large U.S. crude stocks draw and continued hopes of a September cut to U.S. interest rates after strong economic data, PVM's Varga said.

Source: Investing.com