Oil prices closed lower as attention focused on ceasefire negotiations in Gaza.
Investors are also awaiting clues on the U.S. Federal Reserve’s upcoming decision on interest rates.
Oil prices fell by more than $2 per barrel on Monday amid optimism that successful peace talks in the Middle East could reduce supply risks, while concerns over China’s economic weakness, the world’s top crude importer, threaten to curb demand.
Brent futures dropped $2.02, or 2.5%, to $77.66 per barrel, while U.S. West Texas Intermediate (WTI) futures fell $2.28, or 3%, to $74.37 per barrel.
U.S. Secretary of State Antony Blinken stated on Monday that Washington’s renewed diplomatic push to achieve a ceasefire agreement in Gaza might be the last chance and urged all parties to come to an agreement.
Persistent concerns over weak demand in China triggered widespread selling. Weekend customs data showed that China’s diesel and gasoline exports sharply declined in July, reflecting lower crude processing levels due to weak profit margins.
Both benchmarks fell nearly 2% on Friday as investors dialed back their expectations for Chinese demand growth, but ended the week relatively unchanged after U.S. data indicated that inflation is moderating despite strong retail spending.
Investors are also looking for guidance on the U.S. Federal Reserve’s next move on interest rates.
A narrow majority of economists surveyed by Reuters expect the Fed to cut rates by 25 basis points at each of the three remaining meetings this year, an additional reduction compared to last month’s forecasts, with a recession deemed unlikely.
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