Oil prices steady after bruising losses amid China woes

Oil prices were flat in Asian trade on Tuesday after logging steep losses in the prior session as more stimulus measures in China underwhelmed, while focus also remained on U.S. supplies. 

Crude prices tumbled on Monday as China’s plans for more fiscal spending left investors wanting, while inflation data from the world’s biggest oil importer also disappointed.

In the U.S., tropical storm Rafael was seen largely dissipating in the Gulf of Mexico, soothing any fears of supply disruptions in the region.

Brent oil futures expiring in January rose 0.2% to $71.95 a barrel, while West Texas Intermediate crude futures rose 0.2% to $68.04 a barrel by 20:29 ET (01:29 GMT). Both contracts lost over 2% on Monday.

Oil markets were also pressured by a strong dollar, as positioning around a Donald Trump victory in the presidential election pushed the greenback to a four-month high. Markets were also waiting to see what Trump’s policies would entail for U.S. oil production and global supplies.  China stimulus underwhelms, more measures awaited 

China announced a debt swap package worth about 10 trillion yuan ($1.6 trillion) to help support local governments in the coming years. 

But the measure is expected to provide little direct support to the economy. Beijing also held back from announcing any direct fiscal measures to support the property market and private consumption. 

The lack of direct measures rattled sentiment towards the worlds’ biggest oil importer, spurring increased concerns that demand in the country will worsen further.

China’s oil imports have fallen steadily in recent months, while fuel demand in the country was also seen easing.  US supply fears abate as tropical storm Rafael dissipates 

Easing concerns over supply disruptions in the U.S. also weighed on oil prices, as tropical storm Rafael was seen dissipating over the Gulf of Mexico.

Some energy operators in the region were also seen resuming operations, although Reuters reported that about a quarter of oil production in the region still remained offline. 

Rafael weakened to a tropical storm from a hurricane after passing through Cuba, and is expected to weaken further as it drifts southwest.

 

Source: Investing.com