Oil Slumps on China Demand Worries

11 Mar 2024 , 09:52 AM

Due to concerns about slowing demand in China, oil prices continued to fall on Monday, but the dip was somewhat mitigated by ongoing geopolitical risk related to Russia and the Middle East.

U.S. West Texas Intermediate (WTI) declined 50 cents, or 0.6%, to $77.51, while Brent futures slid 48 cents, or 0.6%, to $81.60 a barrel.

WTI dropped 2.5% and Brent dropped 1.8% last week, both benchmarks.

China last week announced a 5% annual economic growth target for 2024, which many observers deemed ambitious in the absence of significant additional stimulus.

According to figures released on Thursday, China’s imports of crude oil increased in the first two months of this year when compared to the same time in 2023, but they were less than in the previous months, extending a pattern of the world’s largest customer slowing down.

On the supply side, early this month saw an agreement between the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, or OPEC+, to continue voluntary oil output cuts of 2.2 million barrels per day into the second quarter.

A rise in the unemployment rate and a slowdown in pay growth, however, prevented the Federal Reserve from implementing its planned interest rate decrease in June, despite data released last week showing that U.S. job growth accelerated in February.

Ismail Haniyeh, the leader of Hamas, accused Israel on Sunday in the Middle East for delaying ceasefire negotiations and rejecting Hamas’ call to put an end to the conflict in Gaza, but he said that Hamas was still looking for a diplomatic solution.

The president of Moldova signed a defence cooperation agreement with France on Thursday, announcing that Russia was stepping up its attempts to destabilise the nation and that President Vladimir Putin would continue if his actions in Ukraine were not stopped.

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