Oil prices fell for a second day on Tuesday as China’s pledge to transform its economy amid slowing growth failed to impress investors worried about slowing consumption.
May Brent futures were down 16 cents, or 0.2%, at $82.64 a barrel by 0301 GMT, while West Texas Intermediate (WTI) was down 28 cents, or 0.4%, at $78.46 a barrel. Brent was on track to fall for the fifth straight session on Tuesday.
China has set an economic growth target of around 5% for 2024, similar to last year’s target, as it vows to “transform” its economic development model and reduce industrial overcapacity.
That target, which would likely provide a boost for fuel consumption if achieved, will be harder to reach this year as China in 2023 benefited from the base effect of a COVID-hit 2022, analysts say, potentially weighing on investor sentiment.
The world’s largest crude oil importer China has pledged to accelerate exploration and development of oil and natural gas resources, while also vowing to tighten control over fossil fuel consumption.
While concerns about China’s demand outlook cause prices to fall, supply factors resulting from major producers reducing production and geopolitical concerns arising from the Israel-Gaza war support crude oil.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday extended voluntary oil production cuts of 2.2 million barrels per day (bpd) into the second quarter to support prices amid global growth concerns and rising production outside the group.
Meanwhile, U.S. crude oil stockpiles were expected to rise by about 2.6 million barrels last week, while distillates and gasoline stockpiles are expected to be lower, according to a survey released Monday.
The market has been on the rise in recent weeks as fundamentals improve. Rising spot prices indicate that the physical market is likely starting to tighten amid supply-side disruptions.
