Oil prices fell on Tuesday on concerns about a slowing Chinese economy, even as a growing consensus that the U.S. Federal Reserve will start cutting its key interest rate in September limited declines.

Brent futures fell 57 cents, or 0.67%, to $84.28 a barrel by 0630 GMT, while WTI crude fell 59 cents, or 0.72%, to $81.32.

Weaker Chinese economic data raises some doubts about whether market participants are overly optimistic about the outlook for Chinese oil demand.

According to official data, the world’s second-largest economy grew 4.7% in April-June. That was the slowest growth since the first quarter of 2023, below the 5.1% forecast for analysts. It also slowed from the previous quarter’s 5.3% expansion amid a prolonged housing crisis and job insecurity.

In China, Q2 GDP and retail sales surprised to the downside by a significant margin referring to a key economic leadership meeting in Beijing this week.

Fed Chair Jerome Powell said on Monday that three U.S. inflation readings in the second quarter of this year “reinforced confidence” that the pace of price increases was returning sustainably to the central bank’s target. Market participants interpreted the comments as a sign that a return to interest rate cuts may not be far off.

Lower interest rates could lower the cost of borrowing, boosting economic activity and oil demand.

Some analysts have warned against being overly optimistic, as expected weakness in some macroeconomic data from the U.S. could indirectly impact oil demand in the near term.

Macro factors are not in favor of higher oil prices in the near term, with the possibility of weaker U.S. retail sales in June expected later today.