Oil Prices Tank on Fears China's Rate Cuts Herald Demand Weakness

Oil prices were trading down nearly 2% in early-morning trading on Thursday, with markets attempting to digest the impact of lagging Chinese consumption on other positive U.S. inventory reports against the backdrop of another interest rate cut by Beijing. At 650 a.m. ET on Thursday, Brent crude was trading down 1.77% at $80.26, while the U.S. benchmark, West Texas Intermediate WTI, was trading down 1.80% at $76.19. Though this week saw another big U.S.

On Thursday, China’s central bank cut interest rates again, lending more concern to analyst fears that demand is shrinking. The People’s Bank of China slashed rates from 2.5% to 2.3% on Thursday in a surprise move that is being interpreted as a response to weak economic growth. Also potentially weighing on prices is Wednesday’s news that Russia, Kazakhstan, and Iraq have established clear plans to compensate for overproduction to raise compliance with OPEC output cuts.

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