NEW YORK: Oil prices steadied on Monday despite Moody’s downgrade of the US sovereign credit rating, and official data that showed slowing growth in China’s industrial output and retail sales.
Both developments raised concerns over the outlook for the world’s two biggest economies and expectations oil demand could slow, after Beijing and Washington’s agreement to roll back most tariffs on each other’s goods pushed oil prices higher.
“The weaker-than-expected Chinese data is not helping crude oil, although I would describe the setback as modest,” said UBS analyst Giovanni Staunovo. Brent crude futures fell 1 cent to $65.39 a barrel by 1438 GMT while US West Texas Intermediate crude inched up 9 cents, or 0.1%, to $62.58. The nearby June WTI contract expires on Tuesday.
Both contracts rose more than 1% last week. Comments from US Treasury Secretary Scott Bessent that President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in “good faith” added to pressure on the oil market.
“Today’s weakness is simply a continuation of crude’s wild ride going nowhere, with the latest move triggered by the Moody’s downgrade and not least Scott Bessent’s warning,” said Ole Hansen of Saxo Bank.
The official Chinese data on Monday showed growth in industrial output slowed in April, though performance was still better than economists had expected.
Investors are monitoring progress in nuclear talks between the United States and oil producer Iran, with uncertainty over the outcome limiting losses in oil prices.
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