Oil futures capped over U.S. fiscal worries, China’s slowdown

Lagos — Crude oil futures remained capped below USD 62 per barrel as market sentiment was weighed down by Moody’s downgrade of the U.S. sovereign credit rating. The latter raised concerns about the country’s growing debt and its potential impact on economic prospects.

Meanwhile, Chinese economic data indicated a slowdown in both industrial production and retail sales growth. The data could temper the optimism resulting from the recent 90-day pause in U.S.-China trade tensions. The temporary nature of the deal left some uncertainty over tariffs and bilateral relations.

In the Middle East, the outcome of the negotiations between the United States and Iran remains unclear, sustaining a degree of risk from a possible increase in supply. A prolonged diplomatic impasse could limit downward pressure on prices.

Markets could remain cautious as traders react to new economic data releases from the US and China this week. US crude inventory and manufacturing data later this week could create additional volatility. Softer data could add fuel to the current downtrend.

*Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade