Oil steady as US storm threat abates, China stimulus disappoints
By Florence Tan
(Reuters) -Oil prices were little changed on Monday (NASDAQ:MNDY ) as the threat of supply disruptions from a U.S. storm eased and after China's stimulus plan disappointed investors seeking fuel demand growth in the world's No. 2 oil consumer.
Brent crude futures fell 9 cents, or 0.1% to $73.78 a barrel by 0916 GMT while U.S. West Texas Intermediate crude futures were at $70.23 a barrel, down 15 cents, or 0.2%.
Both benchmarks fell more than 2% on Friday.
Beijing's latest stimulus package announced at the National People's Congress (NPC) standing committee meeting on Friday fell short of market expectations, IG market analyst Tony Sycamore said in a note, adding that its murky forward guidance hinted at only modest stimulus for housing and consumption.
The latest support measures will not revive China's oil demand growth or oil crude oil imports, said Tamas Varga, analyst at oil broker PVM.
Oil consumption in China, the world's driver of global demand growth for years, has barely grown in 2024 as its economic growth has slowed, gasoline use has declined with the rapid growth of electric vehicles and liquefied natural gas has replaced diesel as a truck fuel.
"After last week's U.S. presidential election attention is slowly drifting back to the underlying fundamentals," Varga said.
Oil prices have also eased after concerns about potential supply disruptions from storm Rafael in the U.S. Gulf of Mexico subsided.
More than a quarter of U.S. Gulf of Mexico oil and 16% of natural gas output remained offline on Sunday, according to the offshore energy regulator.
Looking ahead, there were also concerns that U.S. oil and gas output could rise under the new Trump administration although analysts say 2025's production forecast is unlikely to change.
"We think producers may think twice about turbo-charging U.S. supply in an era when OPEC+ has already staked out plans to gradually raise production targets over the course of 2025," Tim Evans of Evans Energy said in a note.
Trump's election promise of hiking import tariffs to boost the U.S. economy has clouded the global economic outlook although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1% last week.
Source: Investing.com
