Oil prices fell by more than $1 on Friday, with Brent crude slipping below $80 a barrel, primarily influenced by disappointing economic indicators from China. Brent crude futures dropped $1.07 (1.32%) to $79.97 per barrel, while U.S. West Texas Intermediate (WTI) crude futures decreased by $1.27 (1.62%) to $76.89.
Market analysts noted that the oil market is struggling to maintain the recently established $80 per barrel threshold as weak macroeconomic data from China exerts downward pressure. Harry Tchilinguirian from Onyx Capital Group highlighted that geopolitical risks are becoming less of a concern, allowing economic factors to take precedence.
China’s refineries significantly reduced crude processing rates in July due to weak fuel demand, prompting the Organization of the Petroleum Exporting Countries (OPEC) to lower its demand forecast for the year, citing softer expectations for the Chinese market.
The future outlook for oil prices may hinge on the upcoming decision by the U.S. Federal Reserve regarding interest rates, expected at their September meeting. Additionally, the resumption of oil flows by Libya’s Waha Oil Company after maintenance work contributed to the price decline.
Despite the drop, U.S. retail sales data released Thursday exceeded expectations, providing some support for prices by alleviating recession concerns. Analysts noted that better-than-expected economic indicators in the U.S. have bolstered optimism regarding economic growth.
Geopolitical tensions remain, particularly with ongoing ceasefire negotiations related to the Gaza conflict, which have been complicated by recent military actions. Observers are also monitoring potential Iranian responses to the situation involving Hamas.