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KARACHI: Global oil prices continued their downward trajectory on Monday, driven by easing supply concerns and disappointing economic stimulus measures from China.
Brent crude futures fell 0.4% to $73.56 per barrel, while US West Texas Intermediate (WTI) crude dropped 0.5% to $70 per barrel. This decline follows a 2% drop in both benchmarks on Friday.
The primary factor contributing to the price drop was China’s underwhelming stimulus package, unveiled at the National People’s Congress. Market expectations were higher, but the package’s vague forward guidance hinted at only modest support for housing and consumption, according to IG market analyst Tony Sycamore.
ANZ analysts noted that the lack of direct fiscal stimulus suggests Chinese policymakers are adopting a wait-and-see approach, awaiting the impact of future US economic policies before making significant moves.
However, they anticipate additional pro-consumption measures will be announced at the upcoming Politburo meeting and Central Economic Work Conference in December.
China, historically a significant driver of global oil demand, has experienced sluggish oil consumption growth in 2024. This is attributed to slower economic growth, declining gasoline use due to rising electric vehicle adoption, replacement of diesel with liquefied natural gas for trucks
The combination of these factors has led to diminished investor hopes for robust fuel demand, contributing to the ongoing decline in oil prices.
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