Oil rates fall on Thursday as China's financial concerns weigh up
Date
10/20/2024 2:25:23 AM
(MENAFN) Oil prices experienced a decline on Thursday, primarily driven by concerns over China's economic growth not meeting expectations. The international oil benchmark, Brent crude, fell by 0.7 percent to USD73.71 per barrel at 10:30 am local time (0730 GMT), down from the previous session's close of USD74.21. Similarly, the US benchmark West Texas Intermediate also dropped by 0.7 percent, reaching USD69.60 per barrel compared to USD70.12 at the end of the prior session.
These fluctuations in oil prices come amid worries that the recent economic stimulus measures introduced by China may not be sufficient to counter the pressures on the oil market. Specifically, the Chinese government announced a stimulus package for its struggling real estate sector, increasing the loan quota for qualifying companies to 4 trillion yuan in an effort to stabilize the industry. While analysts believe that this package could yield positive effects, they also note that it falls short of the sector's expectations, thereby contributing to ongoing uncertainties in the oil market.
On a more optimistic note, data indicating a drop in crude oil stocks in the United States has provided some support for oil prices. The American Petroleum Institute (API) reported a decrease of 1.58 million barrels in US commercial crude oil inventories, contrary to market expectations of a 3.2-million-barrel increase. This decline in reserves points to a strengthening domestic demand, which could potentially help curb further price drops and even support upward price movements.
Looking ahead, official figures from the Energy Information Administration (EIA) are set to be released later in the day. Should these figures confirm an increase in crude oil inventories, it is likely that prices could rebound. The interplay between global economic conditions and domestic demand trends will continue to influence oil price dynamics in the coming weeks.
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