Oil reverses 2-week high amid Chinese demand worries

Oil drilling rigs

Oil prices fell on Monday after hitting a two-week high on Friday amid concerns over weak demand in China following official data showing a slowdown in retail sales in the world's second-largest economy.

Brent crude futures for February delivery dropped 0.34%, or $0.25, to $74.24 a barrel at 9:30 am Makkah time.

Futures prices for US West Texas Intermediate (WTI) crude for January delivery lost 0.52%, or $0.37, to $70.92 per barrel.

China's retail sales rose by 3% year-on-year in November, compared to a 4.8% increase in October, marking a sharp slowdown in domestic consumption, official data showed.

Crude oil's losses were limited by concerns over disruptions in the Middle East supplies due to the region's deteriorating geopolitical and security situation, in addition to the European Union's imposition of a new package of sanctions on Russia's oil sector last week.

This is in addition to expectations that the Federal Reserve would cut interest rates by 25 basis points at its final meeting of 2024, scheduled for Dec. 17-18.