Oil prices fell for a second straight session on Tuesday as skepticism around China’s economic growth and declining risk appetite countered a weaker U.S. dollar.
Brent crude futures fell 75 cents, or 0.9 per cent, to $82.05 a barrel by 2:08 p.m. ET (1712 GMT), while U.S. West Texas Intermediate crude futures fell 58 cents, or 0.7 per cent, to $78.16 a barrel. Both benchmarks fell more than a dollar earlier in the session.
Weighing on prices, China, the world’s biggest oil importer, set an economic growth target for 2024 of around 5 per cent. While the target is similar to last year’s goal and in line with analysts’ expectations, the lack of big-ticket stimulus plans to prop up the country’s struggling economy disappointed investors.
“The growth target is OK, but the missing part is how they want to achieve that – what sort of stimulus is unclear for now,” UBS analyst Giovanni Staunovo said.
Risk-off sentiment in the broader financial markets also put pressure on prices, Staunovo added. Gold prices hit a record high on Tuesday on rising bets for a U.S. interest rate cut in June, while Wall Street fell on weakness in megacap stocks. [GOL/] [.N]
Providing some support to oil prices, the U.S. dollar slipped on easing growth in the services sector. A cheaper greenback typically supports oil prices by lifting demand from investors holding other currencies.
“Beyond that, the market is really just looking for the next headline here, with the upcoming storage reports in focus,” Mizuho analyst Robert Yawger said.
The latest round of U.S. inventory reports are expected to show crude stocks increased by about 2.1 million barrels last week, while distillates and gasoline stockpiles are forecast to decline, according to an extended Reuters poll.
The first of this week’s two inventory reports, from the American Petroleum Institute industry group, is due after 4:30 p.m. ET (2130 GMT). The U.S. Energy Information Administration will publish its weekly update on Wednesday at 10:30 a.m. ET (1530 GMT).