Investing.com–Oil prices edged lower Monday as concerns about global growth continued to weigh, even following positive cues from the US government avoiding a shutdown over the weekend as well as softer US inflation data.
At 08:20 ET (13:20 GMT), Brent oil futures expiring in February fell 0.4% to $72.27 a barrel, while West Texas Intermediate crude futures dropped 0.4% to $69.15 a barrel.
British growth stagnates
Data released earlier Monday showed that Britain’s economy failed to grow during the third quarter of the year, raising concerns over future economic activity in the sixth largest economy in the world.
The Office for National Statistics lowered its estimate for the change in gross domestic product output to 0.0% in the July-to-September period from a previous estimate of 0.1% growth. The ONS also cut its estimate for growth in the second quarter to 0.4% from a previous 0.5%.
Focus remained largely on demand going into 2025, particularly with top oil importer China struggling to record significant growth and having signaled plans for more stimulus measures in the coming year.
Concerns over slowing demand and increased supplies saw oil prices trading down more than 5% so far in 2024.
Positive US cues support oil prices
Oil traders had been relieved by the US government avoiding a potential shutdown over the weekend, as President Joe Biden approved a stop-gap spending bill approving government funding until March.
Fears of a US shutdown had risen last week after President-elect Donald Trump criticized a bipartisan funding bill for its provisions to Democratic lawmakers and proposed a revised bill which also sought to increase the debt limit. The revised was rejected by lawmakers.
Markets had feared that a US shutdown, especially during the holiday season, would disrupt travel and hurt fuel demand.
Oil markets were also supported by a softer dollar, as the greenback retreated from over one-year highs after PCE price index data – the Federal Reserve’s preferred inflation gauge – read lower than expected for November, indicating some cooling in price pressures.
But the reading came just days after the Fed flagged a slower pace of rate cuts in 2025 – a scenario that could weigh on economic growth and stymie oil demand.
China demand, global supply set the theme for 2025
Going into 2025, focus will be squarely on whether more stimulus measures in China can help spur economic growth.
Focus will also be on US policy under President-elect Donald Trump, who has flagged a more protectionist stance towards China and Iran.
The US could impose more sanctions on Iran’s oil industry, further limiting global supplies.
Recent reports said that the US was also considering more sanctions against Russia oil exports.
(Ambar Warrick contributed to this article.)
This post is originally published on INVESTING.
