Crude oil prices fall on concerns about China's economic outlook

Yesterday, the price of West Texas Intermediate (WTI) oil after opening the Asian session skyrocketed to nearly 78.50 USD/barrel but quickly cooled down, falling more than 2 USD/barrel under profit-taking pressure from the market after oil prices rose to their highest level in more than 2 months.

Source: Michael Pointner

In addition, at the end of a meeting of the National Development and Reform Commission (NDRC), officials in China said they would accelerate spending, repeating most of the plans to boost investment and increasing direct support for low-income groups and new graduates. The failure to introduce new economic stimulus measures caused risk aversion across markets and broke a five-session rally in crude oil prices; at the same time, it affected the price of WTI crude oil, which traded below $74/barrel, down 4.6% at the end of the trading session on October 8, 2024.

Iron ore and base metals fell sharply, agricultural products, and Chinese stock indexes listed in Hong Kong (China) were also affected by a sell-off.

“We have full confidence in achieving the annual economic and social development goals,” Zheng Shanjie, chairman of the NDRC, told reporters at the government’s first press conference after the week-long national holiday.

Commenting on the announcements, ING commodity analysts Ewa Manthey and Warren Patterson said: "Without policy support, the economic slowdown could lead to a decline in China's oil demand in the short to medium term."

However, the oil market remains vulnerable to a flare-up in the Middle East. Traders are watching for Israel to retaliate against Iran after last week’s missile attack, which raised fears of a full-scale war. The worst-case scenario would be if Israel attacked Kharg Island, through which 90% of Iran’s crude exports pass.

Source: https://congthuong.vn/gia-dau-tho-giam-do-lo-ngai-ve-trien-vong-kinh-te-trung-quoc-351169.html