Oil is falling due to Chinese growth fears, despite the scarcity of US supplies

Oil prices turned lower on Wednesday, extending the previous session’s 1 percent loss, as weak economic data from China outweighed tight US crude supplies.

Brent crude futures fell 21 cents to $84.68 a barrel at 0249 GMT, while US West Texas Intermediate crude fell 20 cents to $80.79. Both benchmarks fell to their lowest since Aug. 8 on Tuesday.

And market sources announced, quoting figures from the American Petroleum Institute, that crude stocks in the United States fell by about 6.2 million barrels last week. That was much more than analysts polled by Reuters had expected, a decrease of 2.3 million.

US government data on inventories is due later on Wednesday.

China’s economic activity data for July, released on Tuesday, continues to drive the market lower, after retail sales, industrial production and investment missed expectations, raising concerns about a more severe and prolonged slowdown in the growth of the world’s second-largest economy.

Beijing has cut key interest rates to support activity, but analysts say more support is needed to spur growth.

Activity data for July prompted some economists to point to the risk that China, the world’s largest oil importer, may find it difficult to meet its growth target of around 5 percent for this year without more fiscal stimulus.

Meanwhile, stronger-than-expected retail sales data in the United States, the world’s largest oil consumer, raised concerns that interest rates may remain high for a longer period.

Higher borrowing costs for businesses and consumers could slow economic growth and reduce demand for oil.

The cuts by Saudi Arabia and Russia, the leaders of OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies outside it, have pushed up oil prices over the past seven weeks.