In a twist of market dynamics, crude oil futures experienced a slight downturn for the second consecutive day on Tuesday. Despite China’s optimistic pledge to bolster economic growth and OPEC+ maintaining production cuts, prices failed to gain traction.
The West Texas Intermediate (WTI) contract for April slipped by 72 cents, marking a 0.91% decline to settle at $78.02 a barrel. Meanwhile, May Brent futures dropped 57 cents, or 0.69%, to $82.83 a barrel.
China, a key player in the global economy, unveiled its plans to target an economic growth rate of approximately 5% for 2024. Additionally, the government announced the issuance of $138.9 billion in “ultra-long” special Treasury bonds to finance significant projects. Despite these ambitious moves, the oil market remained unimpressed.
OPEC and its allies, collectively known as OPEC+, had earlier agreed to extend crude production cuts of 2.2 million barrels per day into the second quarter. This decision, however, did not provide the anticipated boost to oil prices.
Walter Chancellor, an energy strategist at Macquarie, noted in a client briefing that the market had already factored in the extension of OPEC+ cuts, resulting in minimal impact on prices.
Traders have been closely monitoring China’s economic growth, as well as the surplus of crude oil from the Americas, particularly the United States. Concerns over these factors contributing to downward pressure on oil prices have persisted for several months.
Despite these challenges, the oil market remains dynamic, with fluctuations influenced by a multitude of factors. As global economic conditions continue to evolve, the future trajectory of crude oil prices remains uncertain.
(Source: CNBC | Reuters | Quantum Commodity)
