WTI crude oil futures fell to around $62.1 per barrel on Monday, extending recent declines as weaker-than-expected economic data from China and a downgrade to the U.S. credit rating dampened investor sentiment.
Oil drops amid China, US growth concerns
The latest figures from Beijing showed a noticeable slowdown in both industrial output and retail sales for April, raising concerns over the strength and sustainability of China’s post-pandemic recovery. As the world’s second-largest oil consumer, any signs of faltering demand in China tend to exert significant downward pressure on global crude prices.
In addition, Moody’s downgrade of the U.S. sovereign credit rating by one notch late Friday—from Aaa to Aa1—triggered fresh concerns about fiscal sustainability and the broader global economic outlook. The ratings agency cited the growing federal deficit, now above $2 trillion, and rising interest costs on the $36 trillion national debt. The move increased caution in financial markets, fueling worries that slower U.S. growth and tighter fiscal conditions could curb future energy demand.
Still, downside pressure on crude prices was limited by persistent geopolitical risks. Market participants remained alert to the uncertain status of Iran–U.S. nuclear negotiations, which hold implications for the return of sanctioned Iranian barrels to the global market. Talks have been intermittent and progress remains elusive, keeping a potential supply increase off the table for now.
Diplomatic developments added a layer of complexity to the energy market
U.S. President Donald Trump announced he would speak with Russian President Vladimir Putin later today to push for an end to the Ukraine war. The announcement follows high-stakes talks held last week in Istanbul—the first direct negotiations between Russia and Ukraine in over three years—raising hopes for a potential de-escalation of the conflict. Any breakthrough that could reduce geopolitical tensions in Eastern Europe might alleviate some supply-side fears, particularly in natural gas and refined product markets, though the impact on crude flows is likely to be limited in the short term.
Looking ahead, oil traders are closely watching inventory data from the U.S. Energy Information Administration (EIA) and updates on OPEC+ production plans, especially as the group approaches its next ministerial meeting. Analysts expect prices to remain volatile in the near term, with sentiment swinging between concerns over demand softness and ongoing geopolitical uncertainties that could disrupt supply.
