Crude oil prices started lower on Tuesday with China lowering its growth forecast for 2019, signaling that the world’s largest oil consumer could see a decline in its crude demand.
International benchmark Brent crude was trading at $65.33 per barrel at 0640 GMT for a 0.4 percent loss after it ended Monday at $65.59 a barrel.
American benchmark West Texas Intermediate was at $56.36 a barrel at the same time, posting a 0.2 percent decline, after closing the previous session at $56.44 per barrel.
China lowered its economic growth expectation for this year to between 6 percent and 6.5 percent, Premier Li Keqiang said Tuesday in his report to the National People’s Congress.
The world’s second biggest economy’s previous growth estimated for 2019 was 6.6 percent, and it saw its GDP grow by 6.6 percent in 2018 — its lowest pace in 28 years.
To boost economic growth, Beijing said it will increase infrastructure investment, cut billions of dollars in taxes and fees, and raise lending to small firms in the country.
Lower growth in the Chinese economy is expected to have a negative impact on both the country’s oil consumption and overall global crude demand to bring oil prices down, experts said.
Trade talks between the U.S. and China, on the other hand, could have a positive impact on Chinese growth and global oil demand.
U.S. President Donald Trump’s administration recently signaled that it could remove tariffs on China if Beijing makes structural changes to intellectual property rights and imports a significant amount of U.S. goods every year.