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BEIJING/LONDON: Oil prices steadied on Tuesday, recovering from a 5 percent drop over the previous two sessions, as investors absorbed OPEC’s latest downward revision for oil demand and market’s disappointment over China’s latest stimulus plan.
Brent crude futures rose 19 cents, or 0.3 percent, to $72.02 a barrel, by 1211 GMT. US West Texas Intermediate crude futures were up 16 cents, or 0.2 percent at $68.20 a barrel.
OPEC cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group’s fourth consecutive downward revision.
In China, the world’s biggest oil importer, inflation data over the weekend showed that consumer prices rose at the slowest pace in four months in October while producer price deflation deepened.
Deflationary risks from China, as well as the lack of concrete fiscal stimulus measures from Chinese policymakers to spur demand, are weighing on sentiment, said Kelvin Wong, a senior market analyst at OANDA.
“On the supply side, it will be the ‘Trump Trade’ narrative that focuses on making the US the major supplier of shale gas, as the current North Dakota Governor Doug Burgum, a pro-oil drilling advocate, is among the short-listed candidates to be named as energy secretary under the incoming Trump administration,” he said.
Beijing unveiled a 10-trillion-yuan ($1.4-trillion) debt package on Friday to ease local government financing strains, as the country faces pressure from the re-election of Donald Trump as US president, who has threatened more tariffs on Chinese goods.
But analysts said it fell short of the amount needed to boost economic growth.
“In a flat price environment that is stalled, supply and demand become even more magnified and at present it would appear that oil market participants do not like what they see,” said John Evans, analyst with oil broker PVM.
The US dollar held around four-month highs on Tuesday, as it is expected to benefit from Trump policies that are likely to keep US interest rates relatively higher for longer.
Markets are also bracing for further signals from US inflation data and Federal Reserve speakers this week.