(CNN)–Oil prices fell sharply on Monday, as investors worried about the state of the economy in China, the world’s largest oil importer.
US crude fell 4.4% to $ 88.03 a barrel, and crude oil recorded its lowest level at $ 86.82, its lowest since February 3, and Brent crude lost 4.5% to $ 93.75 a barrel.
The losses come after new reports that the Chinese economy continues to lose strength, due in part to renewed lockdowns related to the fight against the Corona virus.
The latest data shows retail sales growth slowed in July and the property sector worsened, and China’s central bank cut interest rates on Monday in an attempt to revive growth.
“The market took this as a bearish signal on the outlook for oil demand,” said Richard Joswick, head of global oil supply analytics at S&P Global Commodity Insights.
Meanwhile, oil traders are closely watching negotiations between Iran and the West over a potential nuclear deal, in which sanctions relief could pave the way for millions of barrels of stored Iranian oil to enter the market and allow the OPEC member country to ramp up its production at a time when it is becoming a global supplier. Russian oil is in doubt.
“If a deal is reached with Iran, the implications for the oil market and Russia could be far-reaching,” Andy Lebow, president of Lipow Oil Associates, wrote in a note Monday.
Recent declines in the oil market may put more pressure on fuel prices. The average price of gasoline in the United States of America remained at $3.96 a gallon, on Monday, for the second day in a row, according to the American Automobile Association.
Gasoline prices fell by $1.06 from the record high of $5.02 recorded on June 14.