Oil prices lost some of last week’s gains Monday on fears about China’s growth ahead of expectations Beijing will cut another key interest rate Tuesday.
Brent, the international oil benchmark, fell more than 0.6% to $76.16 a barrel in early trading. It is still up 11.3% since the beginning of the year. Futures for West Texas Intermediate (WTI) crude, the U.S. benchmark, were also down 0.6%, to $76.17 a barrel.
China’s economic recovery after Beijing relaxed Covid-19 restrictions has been slower than expected. Earlier this month, the country posted producer-price inflation that was weaker than expected for May, with prices falling 4.6% from the same period the previous year. It was the weakest reading since 2016.
Economists have been downgrading China’s growth—the latest came from
Goldman Sachs,
which cited coming turbulence when cutting forecasts for 2023 gross domestic product to 5.4% from 6%, CNBC reported.
The lackluster move in oil prices came after a strong end to last week—during which WTI gained 2.3% week over week and Brent crude gained 2.4%, according to Deutsche Bank analysts.
“In commodities, oil finished up the week strong off the back of optimism over China demand,” they wrote. “This followed a Bloomberg report that the Chinese State Council was considering a sweep of stimulus proposals to boost consumption, as well as support for sectors including property.”
Write to Rupert Steiner at [email protected]
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