(Bloomberg) — Oil dropped as broader risk-off sentiment overshadowed news of China’s gradual roll-out of stimulus measures to aid its economy.
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Global benchmark Brent slipped below $75 with traders shying away from risk assets. Equities fell and the dollar strengthened, making commodities priced in the currency more expensive. Chinese banks reduced their benchmark lending rates on Tuesday but the country’s gradual roll-out of broader measures for its ailing economy is fueling a debate among traders over how far authorities will go to aid growth.
“Worries about the Chinese growth are tangible,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “Unless concrete signs of global stock depletion emerge, the market is likely to stay stuck in its current range.”
The market for crude in Asia has firmed in recent days on a flurry of buying by a giant Chinese refiner, though the country’s biggest oil and gas producer cut its demand forecast for this year.
Oil has struggled for direction in recent weeks. A flood of supply from Russia and Iran has kept the availability of crude elevated. Ample supply coupled with central bank hikes has generally pressured prices this year. To try to arrest the drop, the Organization of Petroleum Exporting Countries and its allies have scaled back production.
Read More: Russian Oil Flows Edge Lower But Evidence of Cuts Remains Scant
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Source: https://finance.yahoo.com/news/oil-drifts-lower-concern-chinese-234803896.html