Oil prices slipped on Monday after Moody’s downgraded the U.S. sovereign credit rating and official data showed a slowdown in the pace of China’s industrial output and retail sales.
Front-month Brent crude futures edged down 37 cents, or 0.57%, to $ 65.04 a barrel by 7:00 WAT while U.S. West Texas Intermediate crude dropped 26 cents, or 0.4%, to $62.23 a barrel.
The front-month June WTI contract expires on Tuesday, and the more-active July contract fell 31 cents, or 0.5%, to $61.66 a barrel.
Both contracts rose more than 1% last week after the U.S. and China, the world’s two biggest economies and oil consumers, agreed to a 90-day pause on their trade war with sharply lower import tariffs.
Moody’s downgraded the U.S. sovereign credit rating on Friday over the country’s growing $36 trillion debt pile, a move that could complicate President Donald Trump’s efforts to cut taxes.
Meanwhile, in China, the world’s largest crude oil importer, official data obtained from Reuters showed growth in industrial output slowed in April, though it still fared better than economists had expected.
While Beijing and Washington reached an agreement last week to roll back most tariffs imposed on each other’s goods, the short-term truce and Trump’s unpredictable approach continue to cast a shadow over China’s export-driven economy, which still faces 30% tariffs on top of existing duties.
Meanwhile, the outcome of Iran-U.S. nuclear talks remains uncertain, limiting losses in oil prices.
U.S. special envoy Steve Witkoff said on Sunday that any deal between the United States and Iran must include an agreement not to enrich uranium, a comment that swiftly drew criticism from Tehran.
In Europe, tensions between Estonia and Russia rose after Moscow detained a Greek-owned oil tanker on Sunday after it left an Estonian Baltic Sea port.
In the U.S., producers cut the number of operating oil rigs by 1 to 473 last week, the lowest since January, Baker Hughes said in a weekly report, as they continued to focus on spending cuts that could slow U.S. oil output growth this year.
