Brent Crude traded near its lowest level in three weeks after slipping below $100 a barrel amid speculation that a crash crunch may restrain economic growth in China, the world’s largest energy user.
Having slumped 4.7% last week, the biggest loss since April, Brent Crude saw little change but this fueled concerns for China's economic growth.
The People’s Bank of China said the nation should fine-tune its policies as a cash squeeze in the banking system risks exacerbating an economic slowdown.
“All of a sudden, demand concerns are back in focus and nobody is speaking about supply risks anymore,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. The bank forecasts that Brent will average $105 during the next quarter. "China's economy seems to be slowing down further,” he said.
Brent for August settlement was at $100.63 a barrel, 28 cents lower on the ICE Futures Europe exchange at 1:52 p.m. London time, after temporarily dropping below $100 for the first time since June 3. The European benchmark grade was at a premium of $7.06 to West Texas Intermediate compared with $7.22 on June 21.