Oil prices fell more than $1 per barrel in early trading on Monday, with Brent crude futures down 1.59% to $77.78 and U.S. West Texas Intermediate crude futures slipping 1.59% to $74.36. The decline came as disappointing inflation data from China fueled demand concerns, while the lack of clarity on Beijing’s economic stimulus plans added to market uncertainty.
China’s deflationary pressures worsened in September, with the consumer price index rising just 0.4% and the producer price index dropping 2.8% year-on-year, marking the fastest decline in six months. Investors were left unimpressed after a weekend briefing by the China Ministry of Finance failed to outline a concrete fiscal stimulus package, despite pledges to increase debt issuance.
“The fiscal measures needed to remove downside risks to growth and ignite the animal spirits within Chinese consumers are conspicuous in their absence,” said IG market analyst Tony Sycamore.
Ongoing concerns about possible supply disruptions resulting from geopolitical tensions in the Middle East-which include the possibility of an Israeli response to Iran’s October 1 missile attack-were overshadowed by the bearish sentiment.
Both Brent and WTI benchmarks increased by 1% last week as traders balanced Middle East risks against the short-term boost to U.S. fuel demand from Hurricane Milton. The overall fundamentals outlook continued to be weak, though, as energy major BP reported a $600 million profit drop in Q3 on soft refining margins. The U.S. also had a slight increase in the number of oil and gas rigs. Baker Hughes said its count rose by one rig to 586 for the week to Oct. 11.
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Source: Moneycontrol
News Desk
