Oil falls as US storm threat abates, China stimulus disappoints

By Florence Tan

SINGAPORE (Reuters) – Oil prices extended declines on Monday (NASDAQ:MNDY) as the threat of a supply disruption from a U.S. storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.

Brent crude futures dropped 19 cents, or 0.3%, to $73.68 a barrel by 0104 GMT while U.S. West Texas Intermediate crude futures were at $70.13 a barrel, down 25 cents, or 0.4%.

Both benchmarks fell more than 2% last Friday.

Beijing’s stimulus package announced at the National People’s Congress (NPC) standing committee meeting on Friday fell short of market expectations, IG market analyst Tony Sycamore said in a note, adding that its murky forward guidance hinted at only modest stimulus for housing and consumption.

ANZ analysts said the lack of direct fiscal stimulus implied that Chinese policymakers have left room for assessing the impact of the policies the next U.S. administration will introduce.

“The market will now shift focus to the Politburo meeting and Central Economic Work Conference in December, where we expect more pro-consumption countercyclical measures to be announced,” they added in a note.

Oil consumption in China, the world’s driver of global demand growth for years, has barely grown in 2024 as its economic growth has slowed, gasoline use has declined with the rapid growth of electric vehicles and liquefied natural gas has replaced diesel as a truck fuel.

Oil prices have also eased after concerns about supply disruption from storm Rafael in the U.S. Gulf of Mexico subsided.

More than a quarter of U.S. Gulf of Mexico oil and 16% of natural gas output remained offline on Sunday, according to the offshore energy regulator.

Looking ahead, uncertainty from policies under U.S. President-elect Donald Trump have clouded the global economic outlook although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1% last week.

Oil markets are also being supported by firm demand from U.S. refiners who are expected to run their plants at above 90% of their crude processing capacity on low inventories and improving demand for gasoline and diesel, executives and industry experts said.

This post is originally published on INVESTING.

  • Related Posts

    Gold prices fall on dollar strength as Powell signals cautious rate-cut approach

    Investing.com — Gold prices drifted lower Thursday, falling near to a two-month low, hit chiefly by a stronger dollar after the release of the latest US inflation data.  At 10:45…

    Dollar retains strength against peers on Trump trade

    By Kevin Buckland and Alun John TOKYO/LONDON (Reuters) -The U.S. dollar continued its relentless march higher on Thursday, trading at a one-year high against major peers and headed for a…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Gold prices fall on dollar strength as Powell signals cautious rate-cut approach

    • November 14, 2024
    Gold prices fall on dollar strength as Powell signals cautious rate-cut approach

    Dollar retains strength against peers on Trump trade

    • November 14, 2024
    Dollar retains strength against peers on Trump trade

    Oil settles slightly higher, investors focus on steep draw in fuel stocks

    • November 14, 2024
    Oil settles slightly higher, investors focus on steep draw in fuel stocks

    Oil dips on bigger-than-expected US crude stockbuild, oversupply concerns

    • November 14, 2024
    Oil dips on bigger-than-expected US crude stockbuild, oversupply concerns

    Trump’s transition team aims to kill Biden EV tax credit

    • November 14, 2024
    Trump’s transition team aims to kill Biden EV tax credit

    Exclusive-Trump’s transition team aims to kill Biden EV tax credit

    • November 14, 2024
    Exclusive-Trump’s transition team aims to kill Biden EV tax credit