Oil prices decline in early trade today

6 Mar 2023 , 10:00 AM

In contrast to market predictions of 5.5% growth in the second-largest oil user in the world, China set a modest aim for economic growth this year of approximately 5%.

Brent crude futures were down 50 cents, or 0.6%, at $85.33 a barrel. At $79.22 a barrel, West Texas Intermediate (WTI) oil futures were down 46 cents, or 0.6%.

The carefully regarded GDP outlook for China was lower than the objective of 5.5% set for last year and came in below expectations. Reuters was recently informed by policy sources that a range as high as 6% could be set.

Premier Li Keqiang stated on Sunday that insufficient demand remained a significant issue, the foundation for stable growth in China needed to be strengthened, and the expectations of private investors and enterprises were unstable.

Rate increases worldwide are also anticipated to have an effect on oil prices as they tighten monetary policy due to concerns about rising inflation. Traders have begun to account for rate increases globally, but they are anticipating decreases from last year.

In his testimony before Congress on Tuesday and Wednesday, Jerome Powell, the chairman of the US Federal Reserve, is sure to be questioned about the need for larger rate increases in the world’s top oil consumer.

Future rate increases in the US will likely also be influenced by the February payroll report scheduled on Friday and the February inflation report due the following week.

In order to keep inflation under control, interest rates will likely be raised this month, according to European Central Bank President Christine Lagarde, who stated this over the weekend. On Tuesday, the Australian central bank is anticipated to increase interest rates by 25 basis points.

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