Oil prices fall due to weak demand signals from China

(MENAFN) Oil prices recorded a decline of about 2 percent at the close on Friday, with Brent crude falling below $80 a barrel. Brent crude futures fell $1.36, or 1.7 percent, to settle at $79.68 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell $1.51, or 1.9 percent, to settle at $76.65 a barrel. The overall weekly performance showed little change, with Brent crude ending the previous week at $79.66 and WTI crude at $76.84.

The fall in oil prices was due to lower expectations for demand growth in China, the world's largest oil importer. Recent data from China pointed to a slowdown in economic activity in July. New home prices fell at the fastest pace in nine years, industrial production slowed and the unemployment rate rose. This has heightened concerns about lower oil demand as Chinese refineries significantly reduced crude throughput due to lower fuel consumption.

In addition, both OPEC and the International Energy Agency (IEA) have revised their forecasts downwards, citing weak demand prospects in China as the reason. Despite a brief spike in oil prices earlier in the week on speculation about possible Iranian retaliation following the assassination of Hamas leader Ismail Haniyeh, the market remains cautious. The ongoing ceasefire talks in Gaza, which began in Qatar, will be suspended until next week, adding further uncertainty to the global oil market.

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