Oil down over demand uncertainties in world's largest consumers

ISTANBUL

Oil prices decreased on Monday over demand uncertainties in the US and China, the world's largest oil consumers.

International benchmark Brent crude traded at $82.45 per barrel at 12.44 a.m. local time (0944GMT), a fall of 0.22% from the closing price of $82.63 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $78.45 per barrel at the same time, a 0.24% drop from the previous session that closed at $78.64 per barrel.

The US Federal Reserve (Fed) will review its policy on July 30-31. While investors expect the bank to keep rates unchanged, they will also look for further evidence that a rate cut will happen at the September meeting.

Experts believe that keeping interest rates at high levels for a sustained period may pose risks to the oil demand outlook. While, reducing policy interest rates soon would support economic activity in the country, resulting in higher oil demand.

US President Joe Biden on Sunday dropped out of the race for re-election and backed his Vice President Kamala Harris for the position. The announcement had little effect on the oil markets.

Slower-than-expected economic growth in China, the world's largest crude oil importer, weighed oil prices down after the figures sparked concerns last week over the country's demand for crude.

The gross domestic product (GDP) of China rose by 4.7% in the second quarter of 2024, below market expectations, according to official data, which followed figures showing a softness in oil imports.

Moreover, the country unexpectedly lowered a key short-term policy rate and benchmark lending rates on Monday to boost the economy. Sentiment amid market players surrounding Chinese markets remains weak.