Oil prices fell to their lowest level in months on Monday, after signs emerged that China’s economy is faltering.
The price of West Texas Intermediate crude oil, the U.S. benchmark, dipped below $88 per barrel, down more than 5 percent on the day, hitting its lowest level since January. The price of Brent crude, the international benchmark, fell by a similar amount, to below $94 a barrel, the lowest since March.
China’s economy, which has shown signs of a slowdown for months, sputtered even more in July according to data from the country’s National Bureau of Statistics. Retail sales and industrial production in the month were weaker than expected, according to data released on Monday. The country’s central bank also unexpectedly reduced interest rates by a tenth of a percentage point to help bolster the economy, another signal of tumult.
China’s strict pandemic restrictions have hurt its economy and the countries that are reliant on China for its factories and consumers. Slowing economic growth in China is putting stress on the United States, which is grappling with the possibility of a recession, and European economies upended by Russia’s invasion of Ukraine.
More than half of the cost of gasoline is dictated by oil prices. The decline in oil prices because of China’s slowing economy pushed the average price of gasoline in the United States to $3.965 on Monday, the 62nd consecutive day of declines.