Oil prices plunged to a two-week low in Asian trading due to mounting concerns about China’s economic slowdown and a strengthening dollar driven by the Federal Reserve’s hawkish signals.
Despite significant U.S. crude inventory reduction, the Energy Information Administration (EIA) revealed that U.S. oil production approached pre-pandemic highs.
Brent oil futures fell by 0.2% to $83.13 per barrel, while West Texas Intermediate crude futures dropped 0.4% to $79.03 per barrel.
The surge in U.S. production countered efforts by Saudi Arabia and Russia to cut production, which previously spurred an oil price rally. These factors, combined with China’s bleak economic outlook, weighed heavily on oil prices.
China, the world’s top oil importer, is expected to introduce stimulus measures, including a potential interest rate cut, to reignite growth.