Oil holds decline as poor China economic data weighs on outlook – CNBC TV18
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West Texas Intermediate traded below $71 a barrel after slipping 0.8% on Monday, with Brent closing near $74. Chinese data on Monday showed falling refining activity and weak retail sales, and while the nation’s leaders have signaled stronger stimulus to boost domestic demand, recent steps hint Beijing will likely fall short of the kind of radical action analysts believe is needed to stem deflation.
Crude is set to end 2024 modestly lower, as expectations of a glut next year and the dour outlook in China overshadow geopolitical tensions in Russia and the Middle East. Meanwhile, European nations are set to clamp down on tankers moving Russian crude, as the US signaled it may lower a price cap on the producer’s oil to limit access to funds for the war in Ukraine.
“I’m surprised crude isn’t testing $71 and the lows of its multi-month range” given lackluster demand and Chinese consumption data, said Chris Weston, head of research for Pepperstone Group, referring to Brent. “The news flow is certainly keeping oil traders maintaining a preference to fade rallies.”
Prices have also been trading in a narrow range in recent weeks, pushing oil’s 30-day historical volatility to the lowest since August.
Meanwhile, the US Federal Reserve is expected to further lower interest rates when it meets on Wednesday. That could create room for China’s central bank to also ease monetary policy.
