{"id":4064,"date":"2023-03-06T14:40:20","date_gmt":"2023-03-06T14:40:20","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=4064"},"modified":"2023-03-06T14:40:21","modified_gmt":"2023-03-06T14:40:21","slug":"oil-down-on-china-outlook-spotlight-on-possible-rate-hikes","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/4064\/","title":{"rendered":"Oil down on China outlook, spotlight on possible rate hikes"},"content":{"rendered":"
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Oil prices fell on Monday after China set a lower-than-expected target for economic growth this year at around 5%, and as investors cautiously awaited U.S. Federal Reserve Chair Jerome Powell’s testimony this week.<\/p>\n\n\n\n

Brent crude futures were trading down $1.07, or 1.3%, at $84.76 a barrel at 1322 GMT. U.S. West Texas Intermediate (WTI) crude futures were also down 99 cents or 1.2% at $78.69.<\/p>\n\n\n\n

“Crude remains in a tug-of-war between optimism over Chinese reopening and nervousness over a hawkish Fed hurting the U.S. economy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.<\/p>\n\n\n\n

China’s closely watched growth outlook, announced on Sunday, was lower than its 5.5% gross domestic product (GDP) growth target last year. GDP grew last year by just 3%. Policy sources had told Reuters a range as high as 6% could be set for 2023.<\/p>\n\n\n\n

Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated,\u00a0insufficient demand\u00a0remained a pronounced problem, and the expectations of private investors and businesses were unstable.<\/p>\n\n\n\n

Both crude benchmarks settled more than $1 higher on Friday after two sources told Reuters a report that the United Arab Emirates was\u00a0considering leaving OPEC\u00a0was inaccurate.<\/p>\n\n\n\n

At the same time, oil prices are likely to be impacted by rate hikes across the world as global central banks tighten policy over fears of increasing inflation.<\/p>\n\n\n\n

Traders have started factoring in rate hikes, but are hoping for smaller increases than last year.<\/p>\n\n\n\n

The Fed’s Powell will testify to Congress on Tuesday and Wednesday, where he will likely be quizzed on whether larger hikes are needed in the world’s largest oil consuming country.<\/p>\n\n\n\n

Future U.S. rate hikes are also likely to depend on what the February payrolls report reveals on Friday, followed by the February inflation report due next week.<\/p>\n\n\n\n

Over the weekend, European Central Bank President Christine Lagarde said it was\u00a0“very likely”\u00a0the bank would raise interest rates this month to keep a lid on inflation.<\/p>\n

Updated on