Oil Prices Slide on Chinese Demand Concerns and Anticipation of Fed Rate Cut

Weaker consumer spending in China and expectations of U.S. Federal Reserve rate cuts weigh on oil markets, with geopolitical tensions adding complexity.

• Oil prices dropped from multi-week highs as disappointing Chinese consumer spending data raised concerns about future demand.
• Brent crude fell to $73.59 per barrel, while U.S. West Texas Intermediate crude declined to $70.27 per barrel as of Tuesday morning trading.
• Market participants expect the U.S. Federal Reserve to cut interest rates by 0.25 percentage points during its two-day policy meeting, with further cuts in 2025 and 2026 under consideration.
• Geopolitical factors, including new EU sanctions on Russian oil and potential U.S. actions targeting Iranian oil trade, are contributing to supply uncertainty.
• Analysts note that lower interest rates could stimulate economic growth and oil demand, but oversupply risks from non-OPEC+ producers like the U.S. and Brazil remain a concern for 2025.

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