Oil prices continued to slide during Monday’s Asian trading session, following sharp losses last week as investors turned their attention to upcoming discussions between the U.S. and Russia that could signal easing tensions in the Ukraine conflict.
Weak inflation figures from China, the world’s largest oil importer, also pressured markets, alongside mixed signals about the country’s economic recovery in July. These factors, combined with a series of disappointing economic data points recently, have dampened optimism about future oil demand.
By 21:35 ET (01:35 GMT), October Brent crude futures declined by 0.8% to $66.08 per barrel, while West Texas Intermediate (WTI) crude fell 0.8% to $62.47 per barrel. Both benchmarks had dropped over 4% during the previous week.
US-Russia Summit and Oil Export Sanctions in Spotlight
A summit between U.S. President Donald Trump and Russian President Vladimir Putin is scheduled for August 15, with hopes that talks will pave the way to resolving the ongoing war in Ukraine. Meanwhile, the U.S. has intensified efforts to curb Russia’s oil exports by targeting its largest buyers, China and India.
In an attempt to deter Russian oil purchases, the Trump administration imposed tariffs of up to 50% on Indian imports and threatened similar measures against China. Although these tariff threats provided some support to oil prices last week, concerns remain over broader U.S. trade policies that could suppress demand.
China’s Inflation Disappoints, US Data in Focus
China reported stagnant consumer price inflation for July, while producer prices fell more than expected, underscoring persistent deflationary pressures in the country. This data follows a string of moderate economic reports, suggesting Beijing’s stimulus efforts and a recent easing of trade tensions with the U.S. are offering limited support.
Additionally, adverse weather in July appeared to impact China’s economic activity negatively.
Attention now shifts to the U.S. consumer price index (CPI) for July, set for release on Tuesday. Analysts anticipate that signs of easing inflation could strengthen expectations for a Federal Reserve interest rate cut in September. The CPI reading is particularly important given the U.S.’s role as the largest global oil consumer and the potential inflationary effects from Trump’s tariff policies.
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