Oil prices drop with demand claims regarding China’s unsatisfactory stimulus plan

(MENAFN) Oil prices dropped on Tuesday because of claims that China’s stimulus campaign might not effectively improve the economy of the top oil importing nation in the world, raising concerns about a global oversupply.

The global oil benchmark of Brent crude decreased 0.2 percent to USD71.78 per barrel at 10.45 a.m. local time (0745 GMT), down from the prior session’s end of USD71.91.

The US benchmark West Texas Intermediate further dropped by 0.3 percent to USD67.94 per barrel, compared to USD68.12 at the previous session’s end.

China has approved a bill to raise the quota for issuing special debt bonds to local governments facing debt issues, increasing it to 6 trillion yuan ($840 billion) over the next three years.

Market players are waiting price guidance and demand estimates from OPEC’s monthly statement, projected to be published today, November 12.

Specialists say that the newest stimulus plan published by the Chinese government doesn’t satisfy the anticipations of investors, while market players inquiry how the new stimulus bundle is going to impact oil prices as well as economic growth.

In its newest statement, OPEC reviewed its prediction for international oil demand for the current year downwards by 106,000 barrels a day (bpd) compared to its prior prediction.

The decrease in demand is projected to be mostly due to China.

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