Oil prices fell on Monday due to worries about slow demand in China. Even though, increasing geopolitical risks surrounding the Middle East and Russia limited the decline.
Brent futures fell 55 cents, or 0.7%, to $81.53 a barrel at 0405 GMT, while U.S. West Texas Intermediate (WTI) dropped 57 cents, or 0.7%, to $77.44.
Both benchmarks fell last week, with Brent down 1.8% and WTI 2.5% lower on bearish Chinese data which pointed at softer demand in world’s no. 1 crude importer.
President of NS Trading, a unit of Nissan Securities, Hiroyuki Kikukawa, said “Worries over weak demand in China outweighed the extension of supply cuts by OPEC+.” He added that unclear signs from US jobs data, made traders to adjust positions.
“Still, the losses will be capped by increased geopolitical risk, with the possibility that a ceasefire may not be reached in the Hamas-Israel war and that conflict may expand in Russia and its neighbours,” he said.
China set its economic target for 2024 to around 5%, which many analysts called ambitious without much more stimulus. The country’s crude oil import rose in the first two months of this year, compared with same time last year, though data on Thursday shows it is weaker than the previous months. Reuters gathered.
Earlier this month, OPEC+, agreed to extend its voluntary oil output cuts of 2.2 million barrels per day into the second quarter.
“With OPEC+ extending its voluntary production cut agreement until the end of second quarter, this could tighten the market as demand recovers from its seasonal lull,” analysts at ANZ Research wrote in a note.
