Oil prices pinned near 5-mth low on China woes, US inventory build

investing.com:

Investing.com-- Oil prices moved little in Asian trade on Wednesday, sticking to near five-month lows after a warning on China's economy rattled markets, while signs of an unexpected build in U.S. crude stockpiles also added to pressure on prices.

Crude prices plummeted over the past six weeks, with a bulk of losses coming in recent sessions after the Organization of Petroleum Exporting Countries and allies largely underwhelmed markets with its plans to cut production further in 2024.

The middling cuts indicated that oil markets will not be as tight as initially anticipated in early-2024. They also came amid growing concerns over worsening economic conditions across the globe, which are expected to result in weaker oil demand through the coming year.

Brent oil futures expiring February rose 0.1% to $77.29 a barrel, while Crude Oil WTI Futures steadied at $72.58 a barrel by 20:59 ET (01:59 GMT). Both contracts were at their weakest levels since early-July.

Sentiment was hit particularly hard after ratings agency Moody downgraded its credit outlook on China to negative, and flagged increased economic risks to the country from a property market downturn and a lack of government stimulus.

China is the world’s largest oil importer, and has steadily built up its oil inventories this year- a trend that could see the country wind down oil imports in the coming months, especially if economic conditions worsen.

Moody’s warning on China came on the heels of several weak purchasing managers index (PMI) readings from the country, which indicated that business activity in the world’s largest oil importer remained weak. The country is also grappling with a new outbreak of respiratory illnesses in its major cities.

Concerns over China