Oil Prices Stabilize After Chinese Stimulus Dip

12 Nov 2024 , 10:41 AM

Early trading on Tuesday saw minimal movement in oil prices as traders awaited additional price guidance from OPEC’s monthly report following previous sessions’ market turbulence caused by China’s stimulus plan and worries over oversupply.

As markets awaited additional clues from this week’s Federal Reserve speakers and U.S. inflation data, the U.S. dollar ended Monday’s trading day stronger.

Brent crude prices dropped 1 cent to $71.82 per barrel. West Texas Intermediate crude futures for the United States were up 3 cents at $68.07 a barrel.

In the two trading sessions prior, both contracts had dropped by over 5%. China announced a 10 trillion yuan ($1.40 trillion) debt package on Friday to alleviate the financial burden on local governments, but analysts said it did not provide enough stimulus to spur growth.

The monthly report from the Organisation of Petroleum Exporting Countries (OPEC), which is scheduled to be released later on Tuesday, will provide additional guidance for prices. Through 2025, the market will be watching for more downward revisions in demand from the group’s projection, which would further push prices lower.

Contracts for immediate delivery are less common in a contango futures market than those for future delivery, indicating either that the market is well-supplied in the short term or that there will be a higher demand for oil in the future.

Because of this, goods like oil that are valued in US dollars are more costly for holders of other currencies.

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