Oil prices steady as China boost fades; US inventories seen shrinking
2024.09.24 22:25
Investing.com– Oil prices fell slightly in Asian trade on Wednesday, cooling after optimism over more stimulus measures in China sparked strong gains in the prior session.
Markets took little support from industry data showing U.S. inventories shrank more than expected in the past week.
But oil prices were sitting on two weeks of strong gains, as they rebounded from near three-year lows hit earlier in September.
Prices were boosted by a mix of factors, including supply disruptions in the U.S. and heightened tensions in the Middle East.
expiring in November fell 0.1% to $75.12 a barrel, while fell 0.1% to $71.46 a barrel by 21:39 ET (01:39 GMT).
China stimulus provides initial boost, but analysts say more needed
The People’s Bank of China unveiled a slew of stimulus measures on Tuesday, including increased liquidity measures and looser restrictions on the property market.
The move pushed up hopes that economic growth in the world’s largest oil importer will improve, sparking a 1.7% rally in oil during the session.
But analysts argued that more measures were needed from Beijing to shore up sluggish growth. China has rolled out monetary stimulus repeatedly over the past three years, to little effect.
“Yesterday’s monetary stimulus package is far from being sufficient on its own. In our view, an aggressive fiscal policy is required,” analysts at ANZ wrote in a note.
US inventories shrink- API
Data from the showed U.S. oil inventories shrank by 4.339 million barrels (mb) in the week to September 20, much more than expectations for a draw of 1.1 mb.
The API data usually signals a similar reading from , which is due later in the day.
U.S. inventories were seen remaining tight as supply disruptions due to storms in the Gulf of Mexico offset slower fuel demand after the end of the travel-heavy summer season.
Hurricane Helene is set to make its way through the Gulf in the coming days- the second major storm to hit the area in a month.
