China's new economic stimulus package disappoints, oil prices fall sharply

Oil prices fell more than 2% on Friday after China's latest economic stimulus plan disappointed investors looking for demand growth in the world's second-largest oil consumer, amid a supply glut that looks set to increase by 2025.

Oil prices today, November 12, oil prices fell more than 2% after China's latest economic stimulus plan disappointed investors. (Source: Oilprice)

Brent crude fell $2.04, or 2.76%, to $71.83 a barrel. WTI crude fell $2.34, or 3.32%, to $68.04 a barrel.

Both benchmark oil futures fell more than 2% in the final trading session of last week.

Phil Flynn, senior analyst at Price Futures Group, said Donald Trump's victory in the US presidential election could continue to affect the market.

The dollar index, which measures the greenback against a basket of other currencies, has edged up from a high reached shortly after last week’s U.S. presidential election as markets await more clarity on future U.S. policy. A stronger dollar makes dollar-denominated commodities like oil more expensive for holders of other currencies, which tends to weigh on prices.

In China, consumer prices rose 0.3% in October, down from 0.4% in September and the lowest in four months, while producer price deflation deepened, even as Beijing doubled down on stimulus to support the sluggish economy (announcing a 10 trillion yuan ($1.4 trillion) rescue package).

Amid falling demand from China, crude oil supply from countries outside the Organization of the Petroleum Exporting Countries (OPEC) is expected to increase by 1.4 million barrels per day next year and by 900,000 barrels per day in 2026.

Significant non-OPEC growth next year and an unconvincing Chinese stimulus package could cause inventories to rise even without an increase in output from OPEC and its allies (OPEC+), according to Bank of America.

In late September, OPEC+ said it would increase supply by 180,000 barrels per day in December. However, earlier this month, OPEC+ decided to maintain the supply cuts until January 2025.

The US Offshore Production Authority said the country has yet to restore 25.7% of crude oil production and 13% of natural gas production in the US Gulf Coast despite Hurricane Rafael dissipating.

Domestic retail prices of gasoline on November 12 are as follows:

E5 RON 92 gasoline is not more than 19,744 VND/liter.

RON 95-III gasoline is not more than VND 20,854/liter.

Diesel oil not more than 18,917 VND/liter.

Kerosene not more than 19,294 VND/liter.

Fuel oil not exceeding 16,394 VND/kg.

The above domestic retail price of gasoline and oil was adjusted by the Ministry of Finance - Industry and Trade in the price management session on the afternoon of November 7. Because the world oil price made a hat-trick of increases in the last 3 trading sessions and extended the increase to the first 2 trading sessions of this week, the domestic oil price also followed the trend and increased.

The price of E5 RON 92 gasoline increased by 336 VND/liter, RON 95-III gasoline increased by 351 VND/liter. Oil prices increased more sharply with diesel increasing by 769 VND/liter, kerosene increasing by 461 VND/liter. Only fuel oil recorded a decrease of 67 VND/kg.

In this operating period, the joint ministries did not set aside or use the Petroleum Price Stabilization Fund for E5 RON 92 gasoline, RON 95 gasoline, diesel oil, kerosene, and fuel oil.

Source: https://baoquocte.vn/gasoline-price-to-date-1211-goi-kich-thich-kinh-te-moi-cua-trung-quoc-gay-that-vong-gia-dau-giam-sau-293442.html