Oil prices declined on Tuesday due to renewed demand concerns following China’s economic data, which investors are cautious about ahead of the US Federal Reserve’s interest rate decision.
Brent crude futures fell 72 cents, or 0.97%, to settle at $73.19 a barrel, while US West Texas Intermediate crude dropped 63 cents, or 0.89%, to close at $70.08 a barrel.
Analysts attribute the drop in prices to profit-taking after last week’s 6% rally and disappointing Chinese economic data. The Federal Reserve is expected to cut interest rates by a quarter of a percentage point during its meeting on Tuesday and Wednesday.
A lower interest rate environment can boost economic growth and oil demand. However, growing supplies from non-OPEC+ countries such as the US and Brazil may affect next year’s oil market, particularly if demand in China slows down.
The International Energy Agency warned of a supply overhang of 950,000 barrels per day in 2024, which could impact global supply. Meanwhile, Western countries have announced new EU sanctions against Russia, including measures targeting Chinese entities and vessels from Moscow’s “shadow fleet”.
Source: https://www.cnbc.com/2024/12/17/oil-prices-in-holding-pattern-ahead-of-federal-reserve-decision.html