{"id":25165,"date":"2023-06-20T18:28:29","date_gmt":"2023-06-20T22:28:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/oil-down-as-china-rate-cut-disappoints-powell-awaited\/"},"modified":"2023-06-20T18:28:30","modified_gmt":"2023-06-20T22:28:30","slug":"oil-down-as-china-rate-cut-disappoints-powell-awaited","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=25165","title":{"rendered":"Oil down as China rate cut disappoints; Powell awaited"},"content":{"rendered":"
\n

Investing.com — Smaller-than-expected Chinese rate cuts versus higher-than-expected European rate hikes, as well as the possibility of the Fed returning with a rate increase in July, combined to roil oil prices at the start of a new week.<\/p>\n

New York-traded crude settled down $1.28, or 1.8%, at $70.50 per barrel. The U.S. crude benchmark has had a volatile month, finishing last week up 2.3% after a net 3.5% tumble over two prior weeks.<\/p>\n

London-traded had a far modest decline, settling down just 19 cents, or 0.3%, at $75.90. The global crude benchmark finished last week up 2.4%, after a net slump of nearly 2% over two previous weeks.<\/p>\n

Oil locked and loaded on China<\/strong><\/p>\n

\u201cOil seems locked in on anything and everything that has to do with China,\u201d said Ed Moya, analyst at online trading platform OANDA.<\/p>\n

\u00a0\u201cLast week, oil was supported by improving Chinese refiner quotas. This week, energy traders are seeing oil weakness emerge on disappointing stimulus efforts.\u201d<\/p>\n

Concerns are mounting over China\u2019s growth after the latest cut in its benchmark loan prime rate, or LPR, that came after a slew of major investment banks, most recently Goldman Sachs (NYSE:), slashed their outlook for Beijing\u2019s gross domestic product this year.<\/p>\n

China\u2019s LPR cut on Tuesday was largely anticipated by markets, given that the country had trimmed short and medium-term lending rates last week, following several disappointing economic indicators for April and May.<\/p>\n

While the country has been importing and refining oil at a near record pace, markets fear that steady inventory builds and weak fuel demand, especially as economic growth worsens, could largely stymie China\u2019s appetite for crude imports later this year.<\/p>\n

The world\u2019s largest oil importer is struggling to shore up economic growth amid a downturn in its manufacturing and property sectors, which are China\u2019s biggest economic drivers. The two sectors have failed to recover despite the lifting of anti-COVID restrictions earlier this year.<\/p>\n

ECB maintains rate hikes<\/strong><\/p>\n

The European Central Bank on Thursday announced a new of 25 basis points, taking its main rate to 3.5%.<\/p>\n

The bank has raised rates since July 2022 in an attempt to bring down record-high inflation across the region. The latest inflation reading showed prices cooling down at a faster-than-expected pace, with headline inflation coming in at 6.1% in May.<\/p>\n

Despite the recent slowing in inflation, the ECB actually raised its headline and core expectations for this and next year. It now expects headline inflation at 5.4% this year, at 3% in 2024 and at 2.2% in 2025.<\/p>\n

\u201cWTI crude looks like it is starting to find some decent support at the $68 region and that should hold, as long [as] the Fed does spook markets that they might be ready to deliver more than two additional rate hikes,\u201d said OANDA\u2019s Moya.<\/p>\n

Federal Reserve Chair Jerome Powell is due to address Congress on Wednesday, offering more cues on rates and the economy.<\/p>\n

The prospect of rising U.S. rates has weighed heavily on crude this year, as traders remain concerned that worsening economic conditions, amid tight monetary policy, could dent oil demand.<\/p>\n

U.S. supply is expected to tighten in the near term, especially as fuel demand increases and as U.S. energy firms reduced the number of operational oil rigs for a seventh straight month.<\/p>\n

But the prospect of a U.S. recession, buoyed by weak economic indicators from the country, largely offset any optimism over tighter supply.<\/p>\n

Global crude supplies remain high despite recent production cuts from Saudi Arabia. Recent reports suggested that Iranian crude exports hit five-month highs in May, while Russian crude shipments to major Asian importers \u2014 India and China \u2014 remained robust through the month.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com — Smaller-than-expected Chinese rate cuts versus higher-than-expected European rate hikes, as well as the possibility of the Fed returning with a rate increase in July, combined to roil oil prices at the start of a new week. New York-traded crude settled down $1.28, or 1.8%, at $70.50 per barrel. The U.S. crude benchmark has […]<\/p>\n","protected":false},"author":1,"featured_media":25166,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-25165","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nOil down as China rate cut disappoints; Powell awaited | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com -- Smaller-than-expected Chinese rate cuts versus higher-than-expected European rate hikes, as well as the possibility of the Fed returning\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=25165\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil down as China rate cut disappoints; 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