Oil prices ease fears over Chinese demand, focus on Middle East talks By Reuters

By Yuka Obayashi

TOKYO (Reuters) – Oil prices fell in early Asian trade on Monday as fears of falling demand in top oil importer China weighed on market sentiment as investors focused on progress in Middle East ceasefire talks that could reduce supply risks.

Futures were down 13 cents, or 0.2 percent, at $79.55 a barrel by 0032 GMT. U.S. West Texas Intermediate crude futures were down 13 cents, or 0.2 percent, at $76.52 a barrel.

Both benchmarks fell nearly 2 percent last Friday as investors tempered expectations of rising demand from China, but ended the week largely unchanged from a week earlier after a slew of U.S. data showed the week past that inflation moderated and retail spending was robust.

“Lingering concerns about sluggish demand in China led to a sell-off,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan (OTC:) Securities, adding that another factor was the nearing end of the peak season in the States United. states.

“However, tensions in the Middle East and the escalation of the Russian-Ukrainian war, which pose supply risks, underpin the market,” he said.

Data from China showed on Thursday that its economy lost steam in July, with new home prices falling at the fastest pace in nine years, industrial output slowing and unemployment rising.

That raised concerns among traders about a drop in demand from China, where refiners cut crude processing rates sharply last month due to tepid demand for the fuel.

Meanwhile, US Secretary of State Antony Blinken arrived in Tel Aviv on Sunday on another Middle East tour to push for a ceasefire in Gaza, but Hamas raised doubts about the mission accusing Israel of undermining it the efforts.

Mediating countries – Qatar, the United States and Egypt – have so far failed to narrow enough differences to reach an agreement in months of internal negotiations, and violence continued unabated in Gaza on Sunday.