Oil slips as slowdown in China trims demand expectations

By Ebru Sengul Cevrioglu

ANKARA (AA) - Oil prices decreased on Monday over weak demand signals fueled by slowing economic activity in China and projections of a global economic slowdown.

International benchmark Brent crude traded at $97.38 per barrel at 09.42 a.m. local time (0642 GMT) for a 0.55% drop from the closing price of $97.92 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI), trading at $92.14 per barrel at the same time, decreased 0.53% after the previous session closed at $92.64 a barrel.

Prices started the week on a negative note due to reports of slowing economic activity in China, the world's biggest crude oil importer.

The slowdown in China fueled demand worries in addition to the current recession fears as central banks administer interest rate hikes to mitigate inflation worries.

Expectations that the US will offer additional releases from its Strategic Petroleum Reserves in response to a production cut by OPEC+ also put pressure on prices.

The group of Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed last week to cut daily production by 2 million barrels starting in November.

Following the group's meeting, US officials said President Joe Biden was "disappointed" by the decision by OPEC+ and announced the delivery of another 10 million barrels from the strategic petroleum reserve to the market next month.

Concerns grew further as EU countries on Wednesday reached an agreement on the bloc's eighth sanctions package against Russia, which includes a prohibition on transporting oil to non-EU countries above a certain price.

Analysts expect the prices to be over $100 a barrel in the coming months, though market uncertainties persist.