You are here: Home » International » News » Markets
Business Standard

Oil retreats as China's stimulus package fails to allay concerns

Beijing rolls out measures to try to support Covid-hit economy

Topics
Crude Oil Price | JPMorgan Chase & Co | European Union

Bloomberg 

oil
While US oil consumption is expected to pick up further over a busy summer-driving season, energy usage in China has been crimped by the harsh lockdowns imposed in key cities to combat coronavirus outbreaks.

Oil fell as Chinese efforts to cushion the impact of antivirus lockdowns failed to reassure investors over the outlook for Asia’s top economy. West Texas Intermediate sagged below $109 a barrel after ending little changed on Monday.

The drop came even as China rolled out a broad package of measures to support businesses and aid demand, including policies to help people buy cars and ensure cargo transport runs smoothly. Crude retr­eated alongside other industrial commodities, including copper and iron ore.

As China’s curbs drag on, banks are pruning forecasts for growth in the largest oil importer. UBS Group AG cut its gross domestic product projection to 3 per cent, from 4.2 per cent, while . downgraded to 3.7 per cent, from 4.3 per cent.

chart

US benchmark oil has traded in a narrow range around $110 a barrel over the past two weeks as investors weigh the fallout from the war in Ukraine, including Hungary’s opposition to a (EU) ban on Russian crude, and the outlook for growth.

While US oil consumption is expected to pick up further over a busy summer-driving season, energy usage in China has been crimped by the harsh lockdowns imposed in key cities to combat coronavirus outbreaks.

A high level of uncertainty remains over demand from China, according to Daniel Hynes, a senior commodities strategist at Australia & New Zealand Banking Group. In addition, the stalled EU ban suggests “a move towards the thinking that we won’t see sanctions happen in the short term”, he said.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, May 25 2022. 02:18 IST
RECOMMENDED FOR YOU
.