Oil prices flat amid weak China GDP, US political fallout

Oil prices were muted in Asian trade on Monday as the dollar firmed in the aftermath of an assassination attempt on former U.S. President Donald Trump, while underwhelming growth data from China presented a weak outlook for demand. 

Trading volumes in Asia were somewhat dulled by a Japanese market holiday. But crude was already nursing some losses from last week as a drop in Chinese imports and signs of a cooling global economy soured the outlook for oil demand. 

Brent oil futures expiring in September rose 0.1% to $85.10 a barrel, while West Texas Intermediate crude futures rose 0.1% to $84.15 a barrel by 22:04 ET (02:04 GMT).  Dollar sees some safe haven buying after Trump shooting 

The dollar rose 0.2% against a basket of currencies on Monday, seeing some safe haven demand after a shooting at a Trump rally in Butler, Pennsylvania on Saturday.

Trump was hit by a bullet in the ear, but was otherwise safe. He was seen calling on his supporters to “fight!” in the aftermath of the shooting, and is likely to make an appearance at the 2024 Republican convention later this week. Trump is also widely expected to be officially nominated as the Republican candidate for the 2024 presidential elections. 

Analysts speculated that the shooting could improve Trump’s prospects for a victory over Joe Biden in the race. 

But the move also ramped up uncertainty over the U.S. political climate, largely offsetting optimism over lower interest rates in the country.  China jitters in play as GDP underwhelms, Third plenum approaches 

Concerns over waning oil demand in top importer China were furthered by gross domestic product data showing the economy grew less than expected in the second quarter.

GDP grew 4.7% year-on-year, less than expectations for a rise of 5.1% and slowing from the 5.3% seen in the prior quarter. The softer reading was driven largely by laggard consumer spending, which slowed in the face of heightened economic uncertainty. 

While the country still remained on track to meet its 5% annual GDP target, Monday’s data showed that it faced increased economic headwinds. This could bode poorly for crude demand in the world’s biggest oil importer. 

Focus is now squarely on the Third Plenum of the Chinese Communist Party, set to begin from this week, for more cues on the economy. 

The event is a meeting of top Chinese officials, and could potentially yield more stimulus measures to support the economy.

Source: Investing.com