Oil Prices Settle Lower as China Disappoints
by Bloomberg | Alex Longley, Devika Krishna Kumar, Antonia Muf
click here to read this article at Rigzone.com
*this article was not written by Rosalind Oil & Gas
Oil declined after China’s highly anticipated Finance Ministry briefing on Saturday lacked specific new incentives to boost consumption in the world’s biggest crude importer.
West Texas Intermediate fell around 2% to settle just below $74 a barrel while Brent also slumped. Despite Beijing’s promises of more support for the struggling property sector and hints of greater government borrowing, the briefing didn’t produce the headline dollar figure for fresh fiscal stimulus that the markets had sought. Data showed export growth unexpectedly slowed, curbing a trade rebound that had been a bright spot in a weakening economy.
“The non-event of specifics from Chinese officials about a new stimulus package places another dent in crude demand,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities.
Adding to the gloom, OPEC joined a chorus of others projecting weakening demand growth. The group trimmed its forecasts this year and next for a third consecutive month.
In the options market, traders continue to brace for Israel’s response to Iran’s Oct. 1 ballistic missile attack. For WTI, calls were at the widest premium to puts since 2022, when Russia invaded Ukraine. Weekly volumes for Brent options were the second-highest on record last week, having hit a weekly record the previous week.
Oil Prices:
- WTI for November delivery declined 2.3% to settle at $73.83 a barrel.
- Brent for December settlement dropped 2% to settle at $77.46 a barrel.
A report Saturday said Israel had narrowed down potential targets to military and energy infrastructure. On Monday, Israel said a fresh barrage of missiles was fired from Lebanon a day after a Hezbollah drone strike killed four soldiers. The Pentagon said it would send an advanced missile defense system and associated troops to help shield its ally.
WTI has risen around 8% this month as the prospect of an escalation in the Middle East threatens output from a region that supplies about a third of the world’s oil. The tensions have seen hedge funds flee bearish bets against the crude benchmark at the fastest pace in nearly eight years, while bearish bets on diesel futures plunged by the most on record.
“The market look worse to me in terms of fundamentals but remains held hostage by geopolitics and is likely to stay that way,” said Scott Shelton, an energy specialist at TP ICAP Group Plc.
by Bloomberg | Alex Longley, Devika Krishna Kumar, Antonia Muf
click here to read this article at Rigzone.com
*this article was not written by Rosalind Oil & Gas