Energy
Tuesday, March 5th, 2024 3:26 pm EDT
Key Points
- Oil prices fall despite economic stimulus in China and OPEC+ production cuts:
- Oil prices dropped for a second day in a row.
- China’s plan to boost economic growth and OPEC+ production cuts failed to raise prices.
- China sets modest economic growth target and issues bonds:
- China’s 2024 economic growth target is set at around 5%.
- The government announced issuing special bonds to fund infrastructure projects.
- Market concerns about slowing demand outweigh production cuts:
- The market anticipated the OPEC+ production cuts and already factored them in.
- Traders worry that weak Chinese growth and rising US oil production will decrease demand.
Crude oil futures experienced a second consecutive day of decline on Tuesday despite China’s commitment to bolster economic growth and OPEC+’s decision to continue production cuts. The West Texas Intermediate contract for April decreased by 0.91%, reaching $78.02 per barrel, while May Brent futures dropped by 0.69% to $82.83 a barrel. China revealed its target of approximately 5% economic growth for 2024 and announced issuing $138.9 billion in “ultra-long” special Treasury bonds to support major projects. OPEC and its allies, OPEC+, agreed to maintain crude production cuts of 2.2 million barrels per day through the second quarter, a move anticipated by analysts. Walter Chancellor, an energy strategist with Macquarie, suggested that the extension of OPEC+ cuts had likely been factored into the market’s expectations. Traders remain concerned about sluggish economic growth in China and oversupply of crude from the Americas, particularly the United States, which continues to exert downward pressure on oil prices.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/05/crude-oil-prices-today-wti-brent-fall-as-china-aims-to-boost-growth.html
