Oil Plunges Below $80 Amid China Worries

30 Jul 2024 , 09:56 AM

Early Asian trade on Tuesday saw a decline in oil prices, continuing losses from the previous session as the market discounted the possibility of rising conflict in the Middle East and expressed concerns about Chinese demand.

Brent crude oil futures had dropped by 12 cents, or 0.15%, to $79.78 per barrel. At $75.67 per barrel, U.S. oil futures were down 14 cents, or 0.18%.

Recent days have seen a flurry of depressing economic news from China that has rattled markets. July saw a third month of anticipated declines in China’s manufacturing activity, according to a Reuters poll released on Monday.

Additionally on Monday, Citi lowered its growth prediction for China to 4.8% from 5% after the country’s GDP in the second quarter fell short of analyst projections and the country’s economic activity further contracted in July.

The market is keeping an eye on the Politburo, China’s highest decision-making body, which is scheduled to meet later this week and may result in additional support for economic policies.

However, following the Third Plenum, a crucial policy conference in mid-July, mostly restated the objectives of current economic policy and failed to improve market sentiment, expectations remain low.

Following Israel’s indication that it would respond carefully to a Hezbollah rocket strike in Israeli-occupied Golan Heights on Saturday in order to prevent plunging the Middle East into a full-scale conflict, oil prices dropped 2% during the previous trading session.

This was further supported by a diplomatic campaign by the United States, as reported by Reuters on Monday, to limit Israel’s reprisal and keep it from hitting any significant civilian infrastructure or the capital city of Beirut, Lebanon.

Although the national electoral body in Venezuela certified incumbent Nicolas Maduro the winner, granting him a third term in power, the opposition claimed 73% of the vote.

Protesters assembled on Monday in towns and cities throughout Venezuela as governments in Washington and other places questioned the results and demanded a complete count of the votes.

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