Oil prices dip as demand concerns offset tighter supply outlook

investing.com:

Investing.com-- Oil prices fell in Asian trade on Monday, extending losses from the prior week as markets remained on edge over slowing demand while largely looking past a tighter supply outlook for 2024. 

Middling inflation data from China added to concerns over slowing demand in the world’s largest oil importer, especially as oil import data for the first two months of 2024 largely underwhelmed. 

Fears of weak demand were exacerbated by persistent uncertainty over the path of U.S. interest rates, as nonfarm payrolls data on Friday indicated that the U.S. labor space remained largely resilient. 

Brent oil futures expiring in May fell 0.7% to $81.52 a barrel, while West Texas Intermediate crude futures fell 0.8% to $76.91 a barrel by 21:20 ET (01:20 GMT). 

Data released over the weekend showed Chinese consumer inflation rose marginally in February, benefiting from increased spending during the Lunar New Year holiday.

But producer price inflation shrank more than expected during the period, signaling that China’s biggest economic drivers, factories, remained largely under pressure. 

The readings followed middling import data from China last week. The country imported 10.74 million barrels per day in the January-February period, up 3.3% year-on-year, but down from the 11.39 million barrels per day in December, government data showed.

China also set an underwhelming gross domestic product target for 2024, and has so far offered little cues on any planned stimulus measures to support growth. 

Concerns over sluggish demand largely offset market expectations for tighter supplies this year, even after the Organization of Petroleum Exporting Countries said it will maintain its current pace of production cuts. 

Disruptions in the