Oil prices continued to fall on Monday. The threat of a U.S. storm disrupting supply eased. Meanwhile, China's stimulus plan disappointed many investors.
Brent crude futures decreased by 0.3%, hitting $73.68 per barrel. Similarly, WTI crude fell by 0.4%, now at $70.13. Last Friday, both benchmarks dropped over 2%.
Investors had hoped for stronger support from China's stimulus. Unfortunately, the new plan offered only modest support for housing and consumption. As a result, market expectations were not met.
China, a major oil consumer, is seeing lower oil demand. Its economic growth has slowed in 2024. Additionally, the rise of electric vehicles and LNG replacing diesel have further reduced oil consumption.
Oil prices also fell due to concerns over Storm Rafael in the U.S. Gulf of Mexico. Thankfully, those concerns have eased. Reports show that 25% of U.S. Gulf oil and 16% of gas output were offline over the weekend.
Despite these challenges, U.S. refiners continue to drive demand. Refineries are running at over 90% capacity due to low inventories. Additionally, there is growing demand for gasoline and diesel in the U.S.
The future of oil prices remains uncertain. The new U.S. administration may affect oil policy. Moreover, tighter sanctions on Iran and Venezuela could disrupt oil supply. These factors may impact global oil markets.
For further insights on related topics, visit our Prex Blogs
Oil prices drop as the easing U.S. storm threat reduces supply fears and China's stimulus plan disappoints, affecting global oil demand.
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