# Oil eases on lackluster Chinese import data, U.S. economy woes
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-09
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Fall on Lackluster Chinese Data, U.S. Economy
Meta Description: Discover why oil prices are sliding due to weak Chinese imports and concerns about U.S. economic growth and debt-ceiling negotiations.
URL: https://financedigest.com/oil-eases-on-lackluster-chinese-import-data-u-s-economy-woeshtml

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By Arathy Somasekhar

[HOUSTON](https://www.financedigest.com/shell-to-shut-in-portions-of-louisiana-zydeco-oil-pipeline-for-maintenance.html) (Reuters) -Oil prices fell on Tuesday, retreating from strong gains of the previous two sessions due to lackluster Chinese import data and worries about U.S. [economic growth](https://www.financedigest.com/economic-growth-risks-jolt-inflation-obsessed-markets.html "Economic growth risks jolt inflation-obsessed markets"), banking sector turmoil and debt-ceiling negotiations.

Brent crude was down 86 cents, or 1.1%, at $76.10 a barrel by 11:06 a.m. ET (15:07 GMT). U.S. West Texas Intermediate (WTI) crude fell 83 cents, or 1.1%, $72.34.

We have seen weaker-than-expected [demand in China..](https://www.financedigest.com/oil-rebounds-from-drop-on-china-demand-concerns.html "Oil rebounds from drop on China demand concerns"). and if you were to layer on to that the fears that Congress won’t act to resolve the debt ceiling, combined with a regional [banking crisis](https://www.financedigest.com/explainer-why-is-bank-of-england-acting-again-what-next-in-the-uk-crisis-2.html "Explainer-Why is Bank of England acting again? What next in the UK crisis?"), it leads to additional fears of an economic slowdown,” said Andrew Lipow, president of Lipow Oil Associates in [Houston.](https://www.financedigest.com/shell-to-shut-in-portions-of-louisiana-zydeco-oil-pipeline-for-maintenance.html)

On Monday, both benchmarks rose more than 2% on hopes the U.S., the world’s biggest oil consumer, could avoid a harsh [recession and as some traders viewed crude’s three-week slide](https://www.financedigest.com/wall-st-ends-lower-treasury-yields-slide-as-data-fuels-recession-jitters.html "Wall St ends lower, Treasury yields slide as data fuels recession jitters") as overdone.

But data on Tuesday showed [China’s imports](https://www.financedigest.com/oil-falls-1-as-coronavirus-slower-china-imports-hit-demand.html "Oil falls as coronavirus, slower China imports hit demand") contracted sharply in April, while exports rose at a slower pace, further signs of feeble domestic demand that heaped pressure on an economy struggling in the face of cooling global growth.

Crude looks to be range bound between $70 and $82 until we [see clarification that Asian demand](https://www.financedigest.com/daimler-truck-sees-higher-returns-as-supply-chains-demand-improve.html "Daimler Truck sees higher returns as supply chains, demand improve") is intact,” said Dennis Kissler, senior vice president of trading at BOK Financial.

[Markets were watching](https://www.financedigest.com/idbi-capital-markets-securities-india-rolls-out-apple-watch-voice-and-touch-based-trading.html "IDBI Capital Markets & Securities (India) rolls out Apple Watch voice and touch based trading") U.S. [President Joe Biden and top](https://www.financedigest.com/sri-lanka-top-court-allows-proceedings-against-former-president-rajapaksa-others.html "Sri Lanka top court allows proceedings against former President Rajapaksa, others") Republican lawmakers’ comments on raising the $31.4 trillion U.S. [debt ceiling](https://www.financedigest.com/dollar-eases-before-inflation-data-with-nagging-worries-over-debt-ceiling-impasse.html "Dollar eases before inflation data, with nagging worries over debt ceiling impasse"), fearing an unprecedented default if Congress does not act in three weeks.

U.S. consumer price index (CPI) figures for April are due on Wednesday and could determine the Federal Reserve’s next [interest rate](https://www.financedigest.com/london-stocks-slip-ahead-of-key-interest-rate-decisions.html "London stocks slip ahead of key interest rate decisions") decision. The Fed raised [interest rates last week and dropped guidance about the need](https://www.financedigest.com/boes-pill-sees-need-for-further-interest-rate-rises.html "BoE’s Pill sees need for further interest rate rises") for future hikes.

[Last month](https://www.financedigest.com/fintech-trends-to-look-out-for-during-the-last-six-months-of-2019.html "Fintech trends to look out for during the last six months of 2019"), U.S. consumers said they expected slightly lower inflation in a [year’s time](https://www.financedigest.com/world-food-prices-rise-for-first-time-in-a-year-fao.html "World food prices rise for first time in a year- FAO"), a report from the New York Federal Reserve showed on Monday.

The market is [cautious today ahead of the inflation](https://www.financedigest.com/hm-to-cut-costs-as-profits-hit-by-inflation-cautious-shoppers.html "H&M to cut costs as profits hit by inflation, cautious shoppers") data … With net long positions declining sharply over the last two weeks, a lot of traders are already out of the market, so volumes are low.” said Suvro Sarkar, [lead energy analyst at DBS Bank](https://www.financedigest.com/banks-miners-lead-ftse-100-lower.html "Banks, miners lead FTSE 100 lower").

Also supporting prices, wildfires prompted oil producers in the Canadian province of [Alberta](https://www.financedigest.com/exclusive-repsol-agrees-to-sell-alberta-oil-assets-to-cppib-backed-teine-energy-sources.html "Exclusive-Repsol agrees to sell Alberta oil assets to CPPIB backed-Teine Energy -sources") to shut in at least 280,000 barrels of oil equivalent per day, more than 3% of Canada’s output.

Bank of America [lowered its average Brent price](https://www.financedigest.com/ks-cuts-2023-profit-outlook-on-slow-recovery-lower-potash-prices.html "K+S cuts 2023 profit outlook on slow recovery, lower potash prices") forecast to $80 a barrel for 2023 from $88, citing negative macro trends, tighter credit conditions and higher interest rates that could pressure demand.

(Reporting by Arathy Somasekhar in [Houston,](https://www.financedigest.com/shell-to-shut-in-portions-of-louisiana-zydeco-oil-pipeline-for-maintenance.html) Additional reporting by Ahmad Ghaddar in London, Katya Golubkova in Tokyo and Emily Chow in SingaporeEditing by Kirsten Donovan, David Goodman and David Gregorio)


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