Oil closed with declines of more than 1% due to weak global economic data.

Oil prices fell more than 1% on Tuesday amid concerns that China’s economic slowdown could dampen global demand, despite growing consensus around the Federal Reserve possibly starting to cut its official interest rate in September.

Brent crude futures ended the session down by $1.12, or 1.32%, to $83.73 per barrel, while U.S. West Texas Intermediate (WTI) crude oil retreated $1.15, or 1.40%, to close at $81.76 per barrel.

Weaker Chinese economic data casts some doubts on whether market participants are being too optimistic regarding oil demand prospects from the world’s second-largest economy.

Official data showed China’s economy grew by 4.7% in April-June, its slowest pace since the first quarter of 2023 and below the 5.1% forecast in a Reuters survey. Economic activity slowed from 5.3% in the previous quarter, weighed down by a prolonged downturn in the real estate sector and labor market insecurity.

Second-quarter GDP and retail sales figures have surprised on the downside by a significant margin, while expectations of more robust stimulus measures at the Third Plenum risk falling short of expectations.

Meanwhile, the global economy is expected to achieve modest growth over the next two years, according to the International Monetary Fund (IMF). This outlook reflects cooling activity in the United States, a plateau in the acceleration of Europe, and stronger consumption and exports in China, despite existing risks in the latter area.