Crude oil prices dip below $60: Here we decode why
What's the story
Crude oil prices have continued their downward trend, falling below the $60 per barrel mark. The decline is mainly due to optimism over a potential peace deal between Russia and Ukraine, and weak economic data from China. At the time of writing, Brent crude futures were trading at $59.45 a barrel after falling 1.8%, while US West Texas Intermediate (WTI) crude was down nearly 2% at $55.71 a barrel.
Supply fears
Market concerns over potential Russian oil influx
The possibility of a peace deal has raised concerns among traders about a potential influx of Russian oil into the market. This could further exacerbate global oversupply issues. However, Russia's Deputy Foreign Minister Sergei Ryabkov has tempered these expectations by saying that the country is not willing to make any territorial concessions in the ongoing talks.
Demand worries
China's economic slowdown adds to concerns
Adding to the bearish sentiment in the market, China's official data showed factory output growth slowing down to a 15-month low. Retail sales also expanded at their slowest pace since late 2022. These indicators have raised concerns about insufficient global oil demand, further pressuring prices.