All eyes are on the Organization of the Petroleum Exporting Countries ahead of a highly-anticipated meeting later Thursday when the oil group looks set to extend their crude production cuts, but the big downside risk comes from China, analysts said.
The OPEC and 11 non-members will be negotiating whether to extend an agreement reached in December to cut oil production by about 1.8 million barrels a day in the first half of this year.
Worries about slowing Chinese growth will affect the market, he told CNBC's "The Rundown". The world's second largest economy is also one of the major importers of crude oil.
Moody's Investors Service on Wednesday downgraded China's credit rating to A1 from Aa3, changing its outlook to stable from negative, citing concerns efforts to support growth will spur debt growth across the economy.
That could be problem for the oil industry that has been propped by the East Asian giant as imports grow in China.
Asian demand for crude has grown he added, even as Middle Eastern demand growth has fallen due to reduction in energy subsidies across most countries.
China imported 34.39 million tons of crude oil in April, about 8.4 million barrels a day and up 5.5 percent from a year ago, Reuters reported.
Reference: CNBC
Read more: http://www.cnbc.com/
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