Oil rates drop after China’s latest stimulus dissatisfies investors
Date
11/11/2024 4:18:24 AM
(MENAFN) Oil prices fell on Monday after Beijing’s latest stimulus measures failed to meet investors’ expectations for stronger demand growth in the world’s second-largest oil consumer. The international benchmark for crude oil, Brent, dropped by 0.2 percent to USD73.73 per barrel at 10:37 a.m. local time (0737 GMT), slightly down from the previous session’s close of USD73.88. Similarly, the US benchmark, West Texas Intermediate, saw a 0.27 percent decline, settling at USD70.06 per barrel, down from USD70.25 in the prior session.
China's National People's Congress Standing Committee introduced a debt package on Friday aimed at easing local government financing issues and supporting economic growth. The debt limit increase will amount to 2 trillion yuan (USD279.2 billion) per year over the next three years, as announced by Finance Minister Lan Foan during the NPCSC meeting in Beijing. This move, while intended to stabilize the economy, fell short of market expectations, contributing to the dip in oil prices.
Investors also remain concerned about the potential impact of President-elect Donald Trump's administration on China’s economic growth, particularly in relation to his proposed tariffs. According to commodity strategist Daniel Hynes from the Australia and New Zealand Banking Group, the fear of tariffs from Trump’s government could suppress China’s oil demand. Additionally, concerns about the possibility of renewed US sanctions on Iran under the next administration have raised short-term supply concerns, adding to the uncertainty in the global oil market.
Oil prices continued to decline after the threat of supply disruption from Hurricane Rafael in the US Gulf of Mexico diminished. As the storm's potential impact on oil production subsided, market sentiment shifted, contributing to the easing of oil prices. The combination of geopolitical tensions, economic uncertainties, and lessened supply disruption led to a drop in prices amid increasing concerns about both demand and supply dynamics in the oil market.
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