Oil prices decreased on Monday amid concerns over reduced oil demand in China, the world's second-largest oil-consuming country, following data showing a slide in the country’s inflation rate.
International benchmark Brent crude fell by 1.4% to $77.50 per barrel at 10.45 a.m. local time (0745 GMT), up from the previous session's close of $78.60.
US benchmark West Texas Intermediate (WTI) declined by 0.82% to $73.65 per barrel after closing at $74.84 in the prior session.
In China, the Consumer Price Index (CPI) rose 0.4% compared to the same period last year, while the Producer Price Index (PPI) decreased by 2.8%. In September, the deflationary trend continued to be felt with the stagnation in consumer prices and the decline in producer prices.
The data supported the downward movement of oil prices, overcoming concerns that conflicts in the Middle East could disrupt global supply in the region, where most of the global oil reserves are located.
Meanwhile, the increasing expectations that inflationary pressures are losing their strength in the US, the world's largest oil consumer, prevent oil prices from falling further.
In the US, the PPI remained unchanged on a monthly basis in September, below forecasts, while it increased by 1.8% on an annual basis, exceeding expectations. Core PPI, which excludes volatile food and energy prices, increased by 0.2% month-on-month in September, in line with forecasts, while it rose by 2.8% year-on-year, above forecasts.
Moreover, although the possibilities that the US Federal Reserve (Fed) might keep the policy rate unchanged next month are included in the pricing, the expectation that it will cut by 25 basis points in each of the two meetings to be held by the end of the year remains strong. Anticipated decline in the US dollar value is expected to increase global oil demand.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr