Oil declined at the start of the week after China set a modest growth target for this year and avoided any large stimulus, while concerns lingered over further monetary tightening from the Federal Reserve.
West Texas Intermediate dropped toward $79 a barrel after closing more than 4 percent higher last week. China’s Premier Li Keqiang announced a goal for gross domestic product of around 5 percent at the annual National People’s Congress on Sunday, lower than economists had expected. The nation, the world’s largest oil importer, ended its restrictive Covid Zero policy late last year.
Investors will be watching speeches from Fed Chair Jerome Powell and jobs data this week for clues on the path for monetary tightening. Federal Reserve Bank of San Francisco President Mary Daly reiterated in a speech on Saturday the central bank’s willingness to leave borrowing costs higher for longer.
“A modest weakness is coming back again,” said Charu Chanana, a market strategist for Saxo Capital Markets Pte. “China’s weaker-than-expected growth target set over the weekend may still keep oil prices choppy, with eyes also on any possibility of hawkish remarks from Chair Powell this week.” Oil has held within a tight $10 range since the start of the year, whipsawed by optimism over China’s recovery and expectations of further interest rate hikes from the Fed. Saudi Arabia has signaled confidence in the near term outlook, raising most of its prices for crude shipments to Asia and Europe for April.
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