Oil prices declined significantly as traders shifted their focus back to China's economic challenges and the fading war premium in the Middle East.
Oil prices slumped by more than 4% early on Tuesday as traders have yet to see an actual supply disruption in the Middle East while focusing on China ’s underwhelming demand again. Both benchmarks, WTI Crude and Brent Crude, were down by about 3% as of 930 a.m. EDT on Tuesday. The U.S. benchmark fell below $75 per barrel, and the Brent price was down to the $78 a barrel handle, after breaking above $80 on Monday in an 11% total gain in oil prices since Iran fired missiles on Israel a week ago.
The officials, however, refrained from unveiling additional measures to prop up the economy and oil demand, which disappointed traders and speculators. “China’s National Development and Reforms Commission NDRC failed to announce any new supportive measures. Without policy support, an economic slowdown could keep China’s oil demand subdued in the short to medium term,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Tuesday.
China Economic Demand Middle East War Premium Libya Oil Production Stimulus Measures National Development And Reforms Commission (NDRC Oil Brokerage PMV.
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