Brent crude futures were down $1.59, or 2 per cent, at $79.45 per barrel by 1315 GMT, while U.S. West Texas Intermediate crude futures fell $1.71, or 2.2 per cent, to $76.45.
"The oil market is struggling to retain its recently recaptured $80/bbl floor as the recent string of weak macroeconomic indicators reassert their downward pressure while geopolitical concerns appear to fade into the background," said Harry Tchilinguirian, head of research at Onyx Capital Group.
China's Premier Li Qiang told a cabinet plenary session on Friday that great efforts must be made to boost the economy and the country will focus on stimulating consumption, state media reported.
Data on Thursday showed China's economy lost momentum in July with new home prices falling at the fastest pace in nine years, industrial output slowing and unemployment rising.
"The shape of the Brent futures curve is also changing this morning in favour of less backwardation, as the market reassesses the relative availability of crude in view of disappointing crude import and refinery runs figures out of China," Tchilinguirian said.
Backwardation occurs when spot prices are higher than future prices, giving energy firms little incentive to pay to store fuel.
The Organization of the Petroleum Exporting Countries (OPEC) on Monday trimmed its demand outlook for this year, citing softer expectations for China.
Also keeping a lid on prices was Libya's Waha Oil Company resuming flows to Es Sider port after finishing maintenance work on a pipeline.
The real breakout from rangebound, and potentially firmer, Brent crude prices will likely come when the U.S. Federal Reserve makes a call on whether to cut interest rates or not at its September meeting, independent oil analyst Gaurav Sharma said.
Providing a floor to prices was U.S. retail sales data on Thursday which beat analysts' expectations, while separate data showed fewer Americans had filed new applications for unemployment benefits last week, sparking renewed optimism around U.S. economic growth.
As for lingering geopolitical risks, a fresh round of negotiations began on Thursday to secure a ceasefire in the Gaza war.
Attention is also focused on whether Iran will retaliate over Israel's killing of Hamas political leader Ismail Haniyeh in Tehran late last month.
"Expectations remain that a response will happen given that Iran needs to save face amongst neighbour states," said Panmure Liberum analyst Ashley Kelty.
Oil prices fall more than $2, set for weekly decline on China worries
Chinese refineries sharply lowered crude processing rates last month on tepid fuel demand
FE Team | Published: August 16, 2024 21:18:52
Oil prices fall more than $2, set for weekly decline on China worries
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