Oil dips on demand concerns and possibility of Iran boosting supply

Oil prices fell in early trading on Monday on concerns related to a slowdown in demand in China, the world’s second-largest economy, the possibility of Iranian crude coming back to the market and a US dollar rally.

Brent, the global benchmark for two thirds of the world’s oil, was trading 1.60 per cent lower at $95.17 a barrel at 11.13am UAE time on Monday. West Texas Intermediate, the gauge that tracks US crude,was down 1.80 per cent at $89.14 a barrel.

“Lacklustre Chinese data last week has seen demand concerns continue to outweigh any supply-side issues, despite warnings around upcoming tightness in the market from the new Opec secretary general,” said Emirates NBD’s Mena economist Daniel Richards.

In an interview with Bloomberg last week, Opec secretary general Haitham Al Ghais said global oil markets remained at risk of a supply squeeze.

China, the top importer of crude, also cut lending rates last week to revive demand as its economy slowed unexpectedly in July, with factory and retail activity slumping under Beijing’s “zero-Covid” policy.

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