Oil prices fall after signs of Chinese economic slowdown

West Texas Intermediate Crude Oil Price

[embedded content]

From 12 p.m. Eastern Time

Source: FactSet

By The New York Times

Oil prices fell to their lowest level for months on Monday after signs emerged that China's economy is faltering.

The price of West Texas Intermediate crude oil, the US benchmark, is fell below $89 a barrel at midday, down nearly 4%, its lowest level since February. The price of Brent, the international benchmark, fell by a similar amount, to less than $95 a barrel, the lowest since March.

The Chinese economy , which has shown signs of recovering and slowing for months, deepened further in July according to data from the country's National Bureau of Statistics. Retail sales and industrial production for the month were weaker than expected, data showed Monday. The country's central bank also unexpectedly cut interest rates by a tenth of a percentage point to help support the economy, another signal of turmoil.

Strict pandemic restrictions in China are shutting down and hurting the country's economy and its trading partners who depend on China for factories and consumers. Slowing economic growth in China is putting pressure on the United States, which is grappling with the possibility of a recession, and on European economies shaken by the Russian invasion of Ukraine.

< p class="css-at9mc1 evys1bk0">Saudi Aramco, which reported a 90% increase in profits in its latest quarter, said on Sunday it would increase crude oil production if the Saudi government demanded, which could ease supply constraints and put further pressure on prices.

More than half of the cost of gasoline is driven by oil prices. The recent drop in oil prices pushed the average U.S. gasoline price to $3.965 per gallon on Monday, the 62nd straight day of decline.