Oil Prices Drop Over 7% This Week Amid Concerns Over Chinese Demand

Oil futures posted sharp declines on Friday, capping a more than 7% weekly drop as markets reacted to signs of slowing economic growth in China and uncertainty in the Middle East.

Brent crude futures fell by $1.39, or 1.87%, to $73.06 per barrel, while U.S. West Texas Intermediate (WTI) dropped $1.45, or 2.05%, to $69.22 per barrel. For the week, Brent declined over 7%, and WTI lost around 8%, marking their steepest weekly losses since September 2, when OPEC and the International Energy Agency (IEA) revised down their global oil demand forecasts for 2024 and 2025.

China, the world’s largest oil importer, reported its slowest quarterly economic growth since early 2023, though September’s industrial production and retail sales outpaced expectations. Weak refining margins and soft fuel demand led to a sixth consecutive monthly drop in refinery output, weighing heavily on oil prices.

China is a critical factor for global demand, and its slowdown is having a significant impact on prices today.

Despite sluggish fuel consumption, China’s electric vehicle (EV) market surged, with sales rising 42% in August, surpassing one million units for the first time.

Positive U.S. economic data has provided some relief to concerns about global growth, but traders remain focused on whether recent Chinese stimulus efforts will reignite demand.

Additionally, oil markets remain cautious due to ongoing geopolitical tensions and uncertainty around OPEC+ supply strategies.