Oil prices fell to multi-month lows on Monday, after signs emerged that China’s economy was slowing.
The price of West Texas Intermediate crude, the US benchmark, fell below $88 a barrel, down more than 5% on the day, hitting its lowest level since January. The price of Brent crude, the international benchmark, fell by a similar amount, to below $94 a barrel, the lowest since March.
China’s economy, which has been showing signs of slowing for months, even jumped in July, according to data from the country’s National Bureau of Statistics. Retail sales and industrial production for the month were weaker than expected, according to data released Monday. The country’s central bank was also surprised interest rates fall by one tenth of a percentage point to help prop up the economy, another signal of turmoil.
China’s strict pandemic restrictions have hurt its economy and countries that depend on China because factory and consumer. Slowing economic growth in China is straining the United States, which is grappling with the possibility of a recession, and European economies hampered by Russia’s invasion of Ukraine.
More than half the cost of gasoline is determined by the price of oil. Falling oil prices due to a slowing Chinese economy pushed the average gasoline price in the US to $3,965 on Monday, its 62nd straight day of decline.