Oil Prices Slide Amid Fears of Slowing Chinese Demand

Oil prices fell on Tuesday, extending losses from the previous session, amid concerns about demand in China, the world's largest crude importer. Brent crude oil futures dropped by 40 cents, or 0.5 percent, to $79.38 a barrel, while US crude futures were down 43 cents, or 0.6 percent, at $75.38 a barrel.

The market is worried about the impact of China's economic slowdown on demand for oil. A raft of disappointing economic news out of China has shaken markets recently, including a Reuters poll that showed manufacturing activity likely shrank for a third month in July.

Emril Jamil, a senior analyst at LSEG Oil Research, said the market is weighed down by continuing slack domestic demand from China and potential output restoration by some OPEC+ members in Q4. Tariff tensions with Europe and the US will also influence Chinese crude demand going forward, according to Jamil.

However, expectations are limited after the Third Plenum, a key policy meeting in mid-July, largely reiterated existing economic policy goals and failed to lift market sentiment. The market is watching an upcoming meeting of China's top decision-making body, the Politburo, expected to take place this week, that could elicit further economic policy support.