Oil Holds Decline as Poor China Economic Data Weighs on Outlook
(Bloomberg) -- Oil steadied after falling in the previous session as Chinese economic data failed to dispel concerns about weakening consumption in the biggest crude importer.
Brent traded near $74 a barrel after slipping 0.8% on Monday, with West Texas Intermediate below $71. Chinese refining activity fell in November and retail sales came in well below estimates. The nation’s leaders have vowed stronger stimulus, but there’s skepticism Beijing will be able to revive growth and rescue the property market.
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Crude has fallen by around 14% this half as expectations for a glut next year and the dour outlook in China overshadowed geopolitical tensions in Ukraine and the Middle East. Prices have been trading in a narrow range in recent weeks, pushing oil’s 30-day historical volatility to the lowest since August.
“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.”
European nations are set to clamp down on tankers moving Russian crude, after the US signaled it may lower a price cap on the producer’s oil to limit access to funds for the war in Ukraine.
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.
©2024 Bloomberg L.P.
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