Oil prices: Prices fall after US credit rating downgrade
Oil prices fell on Monday, May 19, due to a downgrade of the US sovereign credit rating by Moody's and official data showing a slowdown in industrial production and retail sales in China.
Brent crude futures for delivery fell 35 cents, or 0.5%, to $65.06 a barrel, while US West Texas Intermediate crude fell 26 cents, or 0.4%, to $62.23 a barrel, according to Reuters. The June WTI contract expires on Tuesday, while the more active July contract fell 31 cents, or 0.5%, to $61.66 a barrel.
Both contracts rose more than 1% last week after the United States and China, the two biggest oil consumers, agreed to a 90-day pause in their trade war with a sharp reduction in import tariffs.
Moody's downgraded the United States' sovereign credit rating on Friday, citing the country's $36 trillion debt, which could complicate President Donald Trump's efforts to cut taxes.
The Moody's downgrade raises questions about the outlook for the U.S. economy, and China's data points to a rocky path for any economic recovery, said Priyanka Sachdeva, senior market analyst at Phillip Nova. The Moody's downgrade may not directly affect oil demand, but it does create a more sobering sentiment in the market, she said.
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