Oil prices dropped more than 1% on Monday after weaker-than-expected Chinese economic growth fueled concerns about demand in the world's second-largest oil consumer, while a partial restart of halted Libyan output also weighed on prices.
China's GDP grew 6.3% year-over-year in the second quarter, slower than expected growth of 7.3% as its post-pandemic recovery faltered due to weakening demand at home and abroad. Chinese authorities face a tough task keeping the economic recovery on track with growth slowing by 0.8% from the previous quarter.
"The GDP came in below expectations, so will do little to ease concerns over the Chinese economy," said Warren Patterson of ING.
Brent crude fell $1.12 to $78.75 a barrel and U.S. West Texas Intermediate crude dropped $1.09 to $74.33 on a second straight day of losses. Both benchmarks had climbed to their highest since April last week on OPEC+ output curbs and Libyan supply disruptions but retreated on Monday.
Oil also lost ground as two of three shuttered Libyan oilfields resumed output after being halted by protests against the abduction of a former finance minister. In another sign of tight supply, Russian oil exports from western ports are set to fall by 100,000-200,000 barrels per day next month.
