Oil prices on global markets experienced a decline following the release of negative gross domestic product (GDP) data from China. However, this development might be offset by growing demand from India, which could help sustain global oil demand at a stable level.

The price of oil, which saw a significant drop earlier this week, was influenced by the unsatisfactory growth of China’s GDP in the second quarter of this year. China’s GDP increased by only 0.8 percent on a quarter-to-quarter basis, compared to over two percent in the first three months of the year. This situation put downward pressure on oil prices in global markets.

Another factor contributing to the decrease in oil prices was the resumption of production in Libya. Two out of the three major oilfields in Libya were producing around 370,000 barrels of oil per day. This increased production added to the oil supply in the market, further driving down its price.

However, the Indian economy is expected to play a crucial role in supporting global oil demand. Experts predict significant growth in global oil demand in the coming months, primarily driven by India. Indian oil demand will mainly rely on gasoline, while the demand for diesel is expected to remain relatively weak.

Predicting the future trajectory of oil prices for the remainder of the year is challenging. On one hand, oil demand is anticipated to weaken with the gradual end of the driving season in the Northern Hemisphere. On the other hand, the OPEC oil cartel aims to maintain high oil prices through production quota agreements, which can influence market dynamics.

Investors are closely monitoring these events and their impact on oil prices. The oil market remains dynamic, and predicting its future course requires careful monitoring of fundamental factors and geopolitical events.

Source: Reuters