Oil prices continued to fall on Monday as the threat of supply disruption from a U.S. storm eased and China’s stimulus package disappointed investors looking to fuel growth of demand in the second largest oil consuming country in the world.
Brent oil futures lost 19 cents, or 0.3 percent, to $73.68 a barrel by 0104 GMT, while West Texas Intermediate oil futures were at $70.13 a barrel , down 25 cents, or 0.4%.
Both benchmarks fell more than 2% last Friday.
Beijing’s stimulus package announced at the National People’s Congress (NPC) standing committee meeting on Friday failed to meet market expectations, Tony Sycamore, market analyst at IG, said in a note, adding that its obscure forecasts suggested only modest stimulus measures for housing and consumption.
ANZ analysts said the lack of direct fiscal stimulus meant Chinese policymakers had left room to assess the impact of policies the next US administration would introduce.
“The market will now focus on the Politburo meeting and the Central Economic Work Conference in December, where we expect more counter-cyclical pro-consumption measures to be announced,” they added in a note .
China’s oil consumption, driving global demand growth for years, barely increased in 2024 as its economic growth slowed, gasoline use declined with the rapid growth of electric vehicles and the Liquefied natural gas has replaced diesel as a fuel for trucks.
Oil prices also fell after fears of supply disruption from Storm Rafael in the US Gulf of Mexico eased.
More than a quarter of oil production and 16% of natural gas production in the Gulf of Mexico remained offline Sunday, according to the offshore energy regulator.
Looking ahead, uncertainty over U.S. President-elect Donald Trump’s policies has clouded the global economic outlook, although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela, and reducing the supply of oil on global markets have partly driven oil prices to rise by more than 1% last week.
Oil markets are also supported by firm demand from US refiners who are expected to operate their plants at more than 90% of their crude processing capacity due to low inventories and improving demand for gasoline and of diesel, industry executives and experts said.
