SINGAPORE — Oil prices slipped on Monday, weighed down by Moody’s downgrade of the US sovereign credit rating and official data that showed a slow down in the pace of China’s industrial output and retail sales.
Front-month Brent crude futures edged down 35 cents, or 0.5 percent, to $65.06 a barrel while US West Texas Intermediate crude dropped 26 cents, or 0.4 percent, 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 percent, to $61.66 a barrel.
Both contracts rose more than 1 percent last week after the US 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 downgrade raises questions about the outlook for the US economy, and China’s data points to a bumpy road ahead for any economic recovery, said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
The Moody’s downgrade may not impact oil demand directly, but it does create more sober market sentiment, she said.
Moody’s downgraded the US 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 showed growth in industrial output slowed in April, though still fared better than economists had expected.
