Oil prices declined on Monday, influenced by Moody’s downgrade of the U.S. sovereign credit rating and slower-than-expected growth in China’s industrial output and retail sales.
Both contracts had risen over one per cent the previous week after the U.S. and China agreed to a 90-day pause on their trade war, with significantly reduced import tariffs.
Moody’s downgrade of the U.S. sovereign credit rating due to the country’s growing $36 trillion debt pile raises concerns about the economic outlook.
According to Priyanka Sachdeva, senior market analyst at Phillip Nova, “Moody’s downgrade raises questions about the outlook for the U.S. economy, and China’s data points to a bumpy road ahead for any economic recovery.”
The downgrade may not directly impact oil demand but creates a more cautious market sentiment.
