# Oil prices wobble on worries over China economy, US rate path
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-08-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil prices wobble on worries over China economy, US rate path
Meta Description: Stay updated on choppy oil prices due to China's economic concerns and potential U.S. rate hikes impacting fuel demand in the world's biggest
URL: https://financedigest.com/oil-prices-wobble-on-worries-over-china-economy-us-rate-pathhtml

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By Sudarshan Varadhan

SINGAPORE (Reuters) – Oil prices were choppy on Thursday after falling over the past three sessions, with the undertone grim on worries that slowing growth in China and possible further U.S. interest rate hikes will weaken fuel [demand in the world’s](https://www.financedigest.com/as-world-cup-breaks-records-adidas-nike-navigate-bumps-in-retail-demand.html "As World Cup breaks records, Adidas, Nike navigate bumps in retail demand") two biggest economies.

Brent crude futures were flat at $83.45 a barrel by 0645 GMT, after initially falling 0.5%. U.S. West Texas Intermediate crude (WTI) was down 8 cents at $79.30.

China’s economic concerns and broad risk-off sentiment on Wall Street pressed on the [oil](https://www.financedigest.com/world-shares-rally-as-china-offers-markets-a-hand.html "World shares rally as China offers markets a hand") markets, with a strong USD adding to the downside pressure at the same time,” said Tina Teng, an analyst at CMC Markets.

Traders will [closely watch](https://www.financedigest.com/finland-watching-its-waters-closely-after-gas-pipeline-blasts-pm-says.html "Finland watching its waters closely after gas pipeline blasts, PM says") Chinese economic data and government policy moves, in addition to U.S. oil [inventory data](https://www.financedigest.com/chinas-low-copper-inventory-data-belie-sufficient-supply.html "China’s low copper inventory data belie sufficient supply") as oil producers in the country could start increasing output to gain market share amid production cuts by the OPEC+ group, Teng said.

In China, missed [payments on investment products by a leading Chinese](https://www.financedigest.com/chinese-payment-giants-revive-effort-to-accept-foreign-credit-cards.html "Chinese payment giants revive effort to accept foreign credit cards") trust firm and a fall in home prices have added to worries that its deepening property crisis is stifling what little momentum the economy has left.

China’s central bank unexpectedly cut key policy [rates](https://www.financedigest.com/oil-holds-steady-near-four-month-high-on-opec-cuts.html "Oil holds steady near four-month high on OPEC+ cuts") for the second time in three months this week but analysts worry it may not be enough to arrest the economy’s downward spiral.

Minutes of the U.S. Federal Reserve’s July meeting released on Wednesday also weighed on oil prices, as they showed that the central [bank’s officials did not give strong indications](https://www.financedigest.com/new-research-indicates-confusing-bank-jargon-could-be-fuelling-financial-vulnerability.html "New research indicates confusing bank jargon could be fuelling financial vulnerability") about pausing rate hikes, as they continued to prioritise the battle against inflation.

Higher interest rates increase borrowing costs for businesses and consumers, which could slow [economic growth and reduce oil demand](https://www.financedigest.com/switch-from-gas-boosts-oil-demand-but-economic-headwinds-loom-iea.html "Switch from gas boosts oil demand, but economic headwinds loom – IEA").

Crude prices are going to struggle here as we have bearish sentiment in the world’s two [largest economies,”](https://www.financedigest.com/bangladesh-moves-up-the-ranks-and-could-become-the-24th-largest-economy-by-2036.html "Bangladesh moves up the ranks and could become the 24th largest economy by 2036") said Edward Moya, an analyst at OANDA.

(Reporting by Katya Golubkova and Sudarshan Varadhan; Editing by Sonali Paul, Muralikumar Anantharaman and Kim Coghill)


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