Oil prices drops as slow Chinese economic recuperation outweigh output cuts

International benchmarks for crude oil dropped on Monday, 19 June 2023, as doubts over China’s economic improvement overshadowed the OPEC+ supply cuts. Although the world’s second-largest economy cut its medium-term policy loans last week and is expected to reduce its benchmark loan rates this Tuesday to facilitate economic recovery, many major international banks have cut their forecasts for China’s GDP growth in 2023.

Economic data for May released in the previous week showed China continued to struggle to retain the pace of post-pandemic recovery. However, the strong refinery throughputs in China helped limit the fall in oil prices.

Brent crude dropped by 48 cents or 0.6% at $76.13/barrel.

US West Texas Intermediate went down by 49 cents or 0.7% now at $71.29/barrel.

Trading volumes were sparse due to a US holiday.