Oil Slides over Weak Economic Growth Outlook in China
Crude oil prices declined on Monday over weak demand after China announced a modest economic growth target. International benchmark Brent crude traded at $85.24 per barrel earlier in the day, down 0.68% from the closing price of $85.83 a barrel in the previous trading session.
At the same time, American benchmark West Texas Intermediate (WTI) traded at $79.19 per barrel, a 0.61% decrease after the previous session closed at $79.68 a barrel.
China, the world’s second-largest economy, reported an official economic growth target of around 5% for 2023 on Sunday, a modest increase from 3% last year and less than half the 8.1% rate from the previous year.
‘China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,’ the country’s Prime Minister Li Keqiang said at the opening of congress on Sunday.
China had imposed an extremely strict pandemic policy for almost two years and continued lockdowns and restrictions since the beginning of the COVID-19 pandemic in early 2020.
During the pandemic, oil demand in the country decreased, causing oil prices to fall. Prices are also coming under pressure over demand weaknesses in the US, the world’s biggest oil-consuming country.
Investors are awaiting Fed Chair Jerome Powell’s semiannual testimony before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday about the central bank’s monetary policy.
His speech comes after the US Federal Reserve said in a report on Friday that interest rate increases will continue in order to lower high inflation.
Meanwhile, the Wall Street Journal reported a growing rift between two of OPEC’s biggest producers, Saudi Arabia and the United Arab Emirates, sparking fears of a crack in the cartel’s policy which could lead to more supplies. # Oil Slides over Weak Economic Growth Outlook in China
