Oil prices dropped as weak economic data from China added to concerns over global demand, with broader markets adopting a risk-off tone. Brent crude traded near $70 per barrel, following a significant decline last week that brought it to its lowest level since 2021. West Texas Intermediate (WTI) was priced below $67 per barrel. China’s consumer inflation fell more than expected, dipping below zero for the first time in 13 months, underscoring ongoing deflationary pressures in the world’s largest crude importer.
In the U.S., former President Donald Trump discussed the economic outlook in an interview with Fox News, describing it as a “period of transition” due to his tariff policies, but refrained from predicting a recession. Meanwhile, Federal Reserve Chair Jerome Powell acknowledged rising economic uncertainty but stated that there was no immediate need for rate cuts.
Crude oil prices have been weighed down by a combination of factors, including the intensifying global trade conflict, OPEC’s plans to increase production, and negotiations to resolve the ongoing war in Ukraine. These elements have prompted speculators to reduce their net-bullish positions on Brent, with the latest cuts marking the largest decrease since July.
“Asia begins the week on a cautious note, with crude following broader market declines,” said Chris Weston, head of research at Pepperstone Group. He added that there is a risk of Brent falling below $68.33 per barrel — last week’s intraday low — with the potential for further selling if technical levels are breached.
In response to the market’s weakening outlook, Saudi Arabia lowered oil prices for Asia, its largest market, for the first time in three months. This move followed OPEC+’s unexpected decision to increase supply starting in April, despite multiple delays in finalizing the plan.
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