LONDON (Reuters) – Oil prices fell on Monday as questions about China’s economy outweighed OPEC+ production cuts and the seventh consecutive decline in the number of oil and gas rigs operating in the United States.

Brent crude fell 17 cents, or 0.2 percent, to $76.44 a barrel by 1319 GMT, while US West Texas Intermediate crude lost 27 cents, or 0.4 percent, to $71.51.

Both contracts ended last week with gains of more than 2%.

“The (Chinese) economy is going through strong headwinds,” said Tamas Varga, an oil analyst at BVM. “The real estate market has not recovered from last year’s slump, and in May retail sales and industrial production came in below expectations.”

A number of large banks have lowered their forecasts for China’s 2023 GDP growth after May data last week showed that the post-COVID recovery in the world’s second-largest economy is faltering.

China is widely expected to cut its benchmark loan rates on Tuesday after a similar cut in medium-term policy loans last week to support a fragile economic recovery.

Sources told Reuters that China will roll out more stimulus for its slowing economy this year, but concerns about debt and capital flight will keep the measures targeting the consumer and private sectors.

However, China’s refinery productivity rose in May to its second-highest total on record, helping to add to last week’s gains, and US energy companies cut the number of oil and natural gas rigs in operation for the seventh straight week for the first time since then. July 2020.

The number of oil and gas rigs, an early indicator of future production, fell by eight to 687 in the week ending June 16 for the lowest total since April 2022. ,.

The rise in Iranian oil exports also affected prices. Iran’s crude oil exports and oil production reached record levels in 2023 despite US sanctions, according to the consultants, shipping data and a source close to the matter, adding to global supplies when other producers limit production.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia agreed this month on a new oil production pact, and Saudi Arabia, the group’s top producer, pledged to significantly cut output in July.

Reporting by Ahmed Ghaddar Additional reporting by Katya Golubkova in Tokyo and Emily Chao in Singapore Editing by David Goodman and Kirsten Donovan

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