WASHINGTON (dpa-AFX) - Oil prices fell nearly 2 percent on Thursday amid concerns over weak demand in China, the world's largest crude importer.
As growth concerns mount, China's central bank today unexpectedly cut a key policy rate and interest paid on bank deposits.
Benchmark Brent crude futures fell 1.7 percent to $80.33 a barrel, while WTI crude futures were down 1.6 percent at $76.32.
China's central bank unexpectedly reduced the medium-term lending facility rate by 20 basis points for the first time since August, after cutting several benchmark lending rates on Monday.
The People's Bank of China cut the rate on one-year medium-term lending facility to 2.3 percent from 2.5 percent and injected CNY 200 billion into the market via MLF.
The off-schedule MLF rate cut came days after lowering the seven-day reverse repo rate and loan prime rate by 10 basis points each.
Despite the rate cuts, concerns persist regarding the challenges facing the Chinese economy, especially in sectors like real estate and consumer spending.
Oil markets also await U.S. GDP data later in the day and a key inflation reading on Friday for clues on whether the world's largest economy is cooling and the potential impact on interest rates.
The U.S. yield curve steepened sharply, signaling that the Fed might cut rates faster and deeper than previously anticipated.
Former New Federal Reserve President Bill Dudley has called for the Fed to cut rates now to avoid a recession.
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