The oil prices They fell on Monday, weighed down by fears that China’s economic situation could affect demand from the world’s largest crude importer.
Brent barrels for September delivery fell 0.99% to $77.69 in London. Its American equivalent, a barrel of West Texas Intermediate (WTI) for August delivery fell 1.17% to $72.79 in the New York market.
“Oil prices have pulled back after last week’s incredible rally,” said Phil Flynn of Price Future Group.
“The data from China seem to suggest that the economy is entering a deflationary environmentwhich is worrying for the global economy,” the analyst added.
Consumer prices in China stagnated in June at 0% year-on-year, while producer prices continued to slide (-5.4%), according to official figures published on Monday.
Those indicators feed fears of deflation, drop in consumer prices in the second world economy.
“Signs of deflation should be positive, but the worry is that demand, whether global or domestic, is not as strong as expected,” said Susannah Streeter, an analyst at Hargreaves Lansdown.
“You might expect that the fall in Chinese prices will stimulate exports“But so far this has not been the case and the rest of the world is feeling the pressures on the cost of living,” he added.
In May, Chinese exports contracted 7.5% year-on-year and manufacturing activity fell for the second consecutive month.
