Oil deepens losses amid China demand fears

Oil prices fell $2 on Monday ahead of a meeting of the U.S. Federal Reserve, as investors tried to figure out the bank’s direction on rate hikes, while the market was affected by concerns about growing fuel demand in China and an increase in Russian crude supplies.

Brent crude futures were down $1.91, or 2.5%, at $72.88 per barrel by 0902 GMT. WTI fell $2.02, or 2.8%, to $86.15 per barrel.

Al Khaman suffered its second consecutive weekly loss last week after disappointing Chinese economic data raised concerns about the growth of demand in the world’s largest crude importer, which was outweighed by a rebound in prices by Saudi Arabia’s decision to cut production by 1 million barrels per day in July.

Most market parties expect the U.S. Central Bank to keep interest unchanged at the end of next Wednesday’s monetary policy meeting. The interest hike boosts the US currency, making dollar-denominated primary commodities the highest price for other currency holders and pressuring prices.
Goldman Sachs cut its oil price forecast due to higher-than-expected supplies from Russia and Iran, and raised its supply forecast from the two countries and Venezuela in 2024 by 800 thousand barrels per day.