Oil prices inch lower as mixed US rate cues weigh; China data in focus
Investing.com-- Oil prices fell slightly in Asian trade on Thursday, cutting short a recent rally as markets awaited more cues on demand from top importer China.
Markets were also navigating mixed signals on U.S. monetary policy. While assurances of interest rate cuts by Federal Reserve Chair Jerome Powell had boosted oil prices on Wednesday, later comments Minneapolis Fed chief Neel Kashkari tempered this optimism.
Brent oil futures expiring in May fell 0.1% to $82.89 a barrel, while West Texas Intermediate crude futures fell 0.1% to $78.33 a barrel by 21:06 ET (02:06 GMT). Both contracts surged about 1% each on Wednesday.
Focus was now squarely on trade data from China, particularly data showing just how much oil the world’s largest crude importer purchased in the first two months of 2024.
The data comes just days after Beijing set a largely underwhelming economic growth target for 2024, at 5%- the same as 2023.
This saw concerns over Chinese demand creep back into markets, as the Chinese government also provided scant cues on its plans for more stimulus measures to support economic growth.
While Powell’s comments had spurred some strength in oil prices on Wednesday, particularly on hopes that the central bank will cut interest rates in 2024, comments from Kashkari cooled this optimism.
Kashkari said that he did not expect more than two, or even one rate cut in 2024, citing concerns over sticky inflation. His comments echoed similar warnings by several other Fed officials- that sticky interest rates will keep the central bank from cutting rates early.
Powell also reiterated concerns over sticky inflation during his testimony on Wednesday, stating that the central bank needed more convincing that inflation will meet
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