Oil prices slip, set for 7% weekly fall on China demand woes, mixed Mideast outlook

Oil futures declined on Friday, on track for a weekly drop of 7%, after data showed China's economic growth slowed and investors digested a mixed Middle East outlook.

Brent crude futures fell $1.11, or 1.49%, to $73.34 a barrel by 12:50 p.m. EDT, while U.S. West Texas Intermediate crude was at $69.53 a barrel, down $1.14 or 1.61%.

Brent was on track to fall around 7% this week while WTI was set to lose 8%, marking their biggest weekly declines since Sept. 2, when OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025.

In China, the world's top oil importer, the economy grew at the  slowest pace since early 2023 in the third quarter, though September consumption and industrial output beat forecasts.

"China is key to the demand side of the equation so that is very much weighing on prices here today," said John Kilduff, partner at Again Capital in New York.

China's refinery output declined  for the sixth straight month as thin refining margins and weak fuel consumption curbed processing.

"We cannot ignore the impact of electric vehicles in China," said Neil Atkinson, Paris-based independent energy analyst and former head of the oil division at the IEA.

"There are various factors at play here, economic weakness in China but also the move towards the electrification of transport."

Electric vehicle sales in China jumped 42% in August and reached a record high of over one million vehicles.