2023-06-20 20:51:35
Oil prices fell as risk aversion prevailed in the markets and was overshadowed by news that China would launch gradual stimulus measures aimed at supporting its economy.
Brent crude contracts, the global benchmark, settled below the level of $76 a barrel, as investors moved away from risky assets.
Chinese banks on Tuesday slashed their lending rate, but the country’s gradual public measures to shore up its ailing economy are sparking a debate among investors regarding how far the authority will go in supporting economic growth.
“It looks like this short week might turn out to be a bad week for oil,” said Edward Moya, senior market analyst at Oanda Corporation.
He added: It seems that risk aversion is returning to the markets amid signs that the recovery of China’s economy will face difficulty in light of the limited stimulus plan.
Goldman cuts its forecast for China’s growth amid limited stimulus options
The over-the-counter market in Asia has strengthened and held in recent days due to a flood of purchases from a giant Chinese refiner, even though the country’s largest oil and gas producer cut its demand forecast for this year.
Oil prices have struggled in recent weeks in search of a direction. The flow of supplies from Russia and Iran kept the markets abundant in crude supply.
Abundant supply and higher interest rates by central banks put pressure on prices in general in 2023. Seeking to stop the price decline, the Organization of the Petroleum Exporting Countries (OPEC) and its allies have cut production.
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