Image Source: Unsplash
 

• WTI price remains on track for a third straight week of decline on Friday.
• Chinese growth concerns put pressure on crude Oil prices.
• Oil demand could be affected due to diminished odds for the Fed rate cuts in September.

West Texas Intermediate (WTI) Oil price holds mild losses, possibly driven by better-than-expected US economic data. The WTI price hovers around $78.00 per barrel during early European hours on Friday. Crude Oil prices are set for a third consecutive week of decline, primarily due to sluggish demand in China, the world's largest crude importer.

Concerns about the weak Chinese economy were heightened by an unexpected rate cut from the People's Bank of China (PBoC) on Monday. China's Q2 growth was 4.7%, the weakest increase since early 2023. The People’s Bank of China (PBOC), cut the one-year Medium-term Lending Facility (MLF) rate from 2.50% to 2.30% on Thursday.

The prices of crude Oil are facing challenges due to growing expectations of a ceasefire agreement for the Gaza conflict and related violence in the Middle East. US Vice President Kamala Harris, the likely Democratic presidential nominee for the November election, pressured Israeli Prime Minister Benjamin Netanyahu on Thursday to facilitate a Gaza ceasefire deal to alleviate the suffering of Palestinian civilians. Harris stated "It is time for this war to end,” per Reuters.

Stronger US economic data have diminished expectations for the Federal Reserve’s (Fed) rate cuts in September, potentially putting pressure on the demand for crude Oil. Higher interest rates negatively affect economic activities in the United States (US), the largest crude consumer, thereby dampening Oil demand. According to CME Group’s FedWatch Tool, markets now indicate an 88.6% probability of a 25-basis point rate cut at the September Fed meeting, down from 94.0% a week earlier.

Traders are likely anticipating the release of the US Personal Consumption Expenditures (PCE) Price Index for June, scheduled for Friday. This data will show changes in the prices of goods and services purchased by consumers in the United States.

More By This Author: