Oil prices have been falling for the second day in a row due to China's announcement to restructure its economy. Investors are worried that such actions will have a serious impact on prices, read more in of UNN.
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China has promised to "transform" its economic development model and limit excess industrial capacity, while setting a target economic growth rate for 2024 of about 5%, which is similar to last year's goal and in line with analysts' expectations.
This has led to investor concerns about declining consumption, which is reflected in prices. May futures for Brent fell 16 cents to $82.64 per barrel, while WTI lost 28 cents to $78.46. On Tuesday, Brent was on track to fall for the fifth consecutive session.
Analysts say that the reshaping of the Chinese economy may be more difficult this year due to certain circumstances, including China's benefit from the previous year, when the impact of the COVID-19 pandemic led to an increase in fuel consumption. China, as the world's largest importer of crude oil, plans to increase the development of oil and gas resources, but is also tightening control over the use of coal fuel.
Блокада польской границы: Украина потеряла уже около 500 миллионов долларов04.03.2024, 20:52
While concerns about China's demand outlook weighed on prices, supply factors related to production cuts by major producers and geopolitical concerns over the war between Israel and Gaza supported oil prices.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided on Sunday to extend a voluntary 2.2 million barrels per day oil production cut during the second quarter to support prices, due to worrying signs of global growth and increased production outside the group.
However, according to preliminary forecasts, crude oil stocks in the US are expected to increase by about 2.6 million barrels, while distillate and gasoline stocks are projected to be lower.
The market has been growing in recent weeks amid improving fundamentals. The rise in spot prices indicates that the physical market has begun to tighten amid a variety of other supply disruptions
Recall
The United Kingdom continues to indirectly importand millions of barrels of Russian oil each year through petroleum products refined from Russian crude oil in countries such as India, which are then exported to the UK, undermining Western sanctions aimed at limiting Russian oil revenues.