Oil prices fall amid concerns over data from the US and China
Kyiv • UNN
Oil prices fell due to Moody's downgrade of the US rating and data on China's industrial slowdown. Negotiations between Iran and the US are also affecting prices.
Oil prices fell on Monday, triggered by Moody's downgrade of the US sovereign credit rating and official data showing a slowdown in industrial production and retail sales in China, UNN reports citing Reuters.
Details
Brent crude futures for delivery in the near month fell 51 cents, or 0.8%, to $64.90 a barrel by 06:30 GMT (09:30 Kyiv), while US West Texas Intermediate crude fell 45 cents, or 0.7%, to $62.04 a barrel.
Both benchmarks rose more than 1% last week after the US and China, the world's two largest economies and oil consumers, agreed to a 90-day pause in their trade war with sharply reduced import duties.
Moody's downgrade casts doubt on the US economic outlook, and China's data indicates a bumpy path to any economic recovery, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Moody's downgrade may not directly affect oil demand, but it does create a more sober mood in the market, she said.
On Friday, Moody's lowered the US sovereign credit rating due to the country's growing debt of $36 trillion, which may complicate US President Donald Trump's efforts to cut taxes, the publication said.
Meanwhile, in China, the world's largest crude oil importer, official data showed that industrial production growth slowed in April, although it still proved better than economists had expected.
Although Beijing and Washington reached an agreement last week to lift most of the tariffs imposed on each other's goods, the short-term truce and Trump's unpredictable approach continue to cast a shadow over China's export-oriented economy, which still faces 30% tariffs, the publication writes.
Meanwhile, the outcome of Iran-US negotiations on the nuclear program remains uncertain, limiting losses in oil prices.
US Special Envoy Steve Witkoff said on Sunday that any deal between the United States and Iran must include an agreement to abandon uranium enrichment, which quickly drew criticism from Tehran.
"There was a lot of hope placed in these negotiations," said IG market analyst Tony Sycamore.
"Realistically, Iran is unlikely to ever voluntarily agree to peacefully abandon its nuclear ambitions, which it has always considered non-negotiable. Especially after the collapse of its proxies, which in the past served as a buffer between it and Israel," he said, referring to Hamas, Hezbollah, and the Houthis, the publication writes.
In Europe, tensions between Estonia and Russia have risen after Moscow detained a Greek oil tanker on Sunday after it left an Estonian port on the Baltic Sea, the publication notes.
In the US, producers cut the number of active oil rigs by 1 to 473 last week, the lowest since January, according to Baker Hughes' weekly report, as they continue to focus on cost cuts that could slow US oil production growth this year.