Oil Slides More Than 1 Percent as Chinese GDP Dents Demand Hopes

Oil Slides More Than 1 Percent as Chinese GDP Dents Demand Hopes
A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, on Nov. 22, 2019. (Angus Mordant/Reuters)

LONDON—Oil dropped by more than 1 percent on Monday after weaker than expected Chinese economic growth fuelled concern over demand in the world’s second-biggest oil consumer while a partial restart of halted Libyan output also pressured.

China’s gross domestic product (GDP) grew 6.3 percent year on year in the second quarter, compared with analyst forecasts of 7.3 percent, with its post-pandemic recovery faltering rapidly owing to weakening demand at home and abroad.

“The GDP came in below expectations, so will do little to ease concerns over the Chinese economy,” said Warren Patterson, ING’s head of commodities research.

Brent crude fell $1.39, or 1.7 percent, to $78.48 a barrel by 1015 GMT and U.S. West Texas Intermediate crude dropped by $1.34, or 1.8 percent, to $74.08 on a second straight day of losses for both contracts.

Both benchmarks had notched three weeks of gains and touched their highest since April last week, finding support from OPEC+ output curbs and unplanned outages in Libya and Nigeria.

Oil also came under pressure on Monday from the resumption of output at two of the three Libyan fields that were shut last week. Output had been halted by a protest against the abduction of a former finance minister.