China Worries Over Lower Oil Prices

The Chinese economy is bracing for the economic burden induced by drastically lower oil prices.

Following OPEC's announcement last week of lower consumer demand for oil, the price of crude fell by as much as $2 per barrel Friday. Now, China is preparing for oil prices to plummet even more.

The oil company Brent, one of the largest sources of unrefined crude in China, was down in futures by 2%, following a market-wide trend of lower oil prices.

The Premier of China Li Qiang proposes stimulating consumer consumption of oil and making strong investments in the economy to counter lower oil prices, Chinese state media reported. This is coming amid falling property prices and a subsequent real estate bubble to burst in China.

Falling oil prices emerged last week after Chinese tensions with Taiwan heighten and new geopolitical risks emerged.

"The oil market is struggling to retain its recently recaptured $80/bbl floor as the recent string of weak macroeconomic indicators reassert their downward pressure while geopolitical concerns appear to fade into the background," said Harry Tchilinguirian, head of research at Onyx Capital Group.

China has recently reduced the rate at which it is refining oil.