Oil prices decline on China’s shrinking economic growth

Brent's crude price lost upward momentum after China posted a slower-than-expected economic growth rate in the second quarter of this year.

PHOTO: The Chinese flag with oil pumpjack silhouettes in the background. Getty Images

China’s gross domestic product (GDP) grew by 4.7% in the second quarter of this year, down from the 5.3% growth rate recorded in the previous quarter, according to data from the National Bureau of Statistics (NBS).

“By quarter, the GDP for the first quarter increased by 5.3 percent [5.3%] year on year and for the second quarter 4.7 percent [4.7%],” NBS said in a statement.

Brent’s price reacted negatively to the news as it indicated that the world’s second-largest oil consumer was still grappling with inadequate demand, analysts said. “There are growing demand concerns, largely emanating from China,” two analysts from ING Bank remarked.

The growth rate was much lower than the 5.1% GDP expansion predicted by analysts polled by Reuters.

“[Brent] crude futures were trading almost flat with Friday’s modestly lower settle early Monday in Asia, digesting China’s second-quarter GDP growth coming in at a worse-than-expected 4.7% annual growth,” VANDA Insights’ founder and analyst Vandana Hari said.

By Aparupa Mazumder 

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