Energy

U.S. crude oil posts third weekly decline as China demand raises concerns

U.S. crude oil posts third weekly decline as China demand raises concerns

Oil pumpjacks operate in Los Angeles, California, July 31, 2023.
Mario Tama | Getty Images

U.S. crude fell more than 1% on Friday, posting a third weekly decline as worries about demand in China outweigh strong economic growth in the U.S.

West Texas Intermediate oil fell 3.7% this week, while Brent dropped 1.8%.

The U.S. economy grew at a 2.8% pace in the second quarter, much stronger than expected. But oil imports to China were down 10.7% year over year in June, and refined product imports fell 32% during the same period, according to customs data. China is the world’s largest crude importer.

Here are Friday’s closing energy prices:

  • West Texas Intermediate September contract: $77.16 per barrel, down $1.12, or 1.43%. Year to date, U.S. oil has gained 7.7%.
  • Brent September contract: $81.13 per barrel, down $1.24, or 1.51%. Year to date, the global benchmark is ahead 5.3%.
  • RBOB Gasoline August contract: $2.46 per gallon, little changed. Year to date, gasoline is up 17%.
  • Natural Gas August contract: $2 per thousand cubic feet, down 3 cents, or 1.71%. Year to date, gas is down 20.2%.

Surprise rate cuts in China raised concerns that Beijing is struggling to breathe life into the world’s second-largest economy. The People’s Bank of China implemented a surprise interest rate reduction on Monday, followed by a trim to its medium-term facility lending rate on Thursday.

“The semi-panicky moves are increasing concerns that Chinese energy demand may be further into the future than expected,” Bob Yawger, executive director of energy futures at Mizuho Securities, told clients in a note Thursday.

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