Oil futures looked to post back-to-back declines on Tuesday, as investors weighed prospects for energy demand after China’s leadership outlined its economic plans.Price moves
West Texas Intermediate crude
CL00,
-0.71%
for April delivery fell 68 cents, or 0.9%, at $78.06 a barrel on the New York Mercantile Exchange after losing 1.5% on Monday.
May Brent crude
BRN00,
+0.01%
BRNK24,
+0.01%,
the global benchmark, was down 67 cents, or 0.8%, at $82.13 a barrel on ICE Futures Europe following a 0.9% loss a day earlier.
April gasoline
RBJ24,
-2.11%
shed 2.1% to $2.5309 a gallon, while April heating oil
HOJ24,
-1.63%
declined by 1.4% to $2.6091 a gallon.
Natural gas for April delivery
NGJ24,
+2.30%
traded at $1.938 per million British thermal units, up 1.2%, extending a gain of 4.4% from Monday.
Market drivers China’s growth target is seen as “ambitious,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note, observing that U.S. crude “failed to extend gains above $80 per barrel even after the Chinese stimulus bets.”
China’s official growth target for 2024 is around 5%, Premier Li Qiang said Tuesday in an annual report, as the country struggles to deal with a real estate crisis. Li said the government plans to issue 1 trillion yuan (about $139 billion) in “ultralong special treasury bonds” in 2024 and over each of the coming several years — a long hoped-for extra promise of government spending to help support flagging growth. The government also plans to provide support for debt-strapped local governments facing “economic difficulty,” he said. “While oil seems to be disappointed with the Chinese news as far as their growth targets, the reality is it’s very, very bullish,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “We expect that the demand in the United States and the rest of the world will exceed expectations.” Not only will we see record demand for oil, “we’re going to see a market that’s going to be undersupplied in the second half of the year,” he said. “More and more the futures spread seems to be suggesting the same thing,” said Flynn, referring to backwardation in the futures contracts. That refers to a situation where prices for oil for delivery in the near future are higher than those for later deliveries, suggesting tightness in oil supplies. Crude prices had also stumbled Monday, failing to find support after OPEC+ extended voluntary production cuts of 2.2 million barrels a day into the second quarter. “An oversupply in the second quarter should now be avoided. However, an extension for a further three months was already expected,” Carsten Fritsch, commodity analyst at Commerzbank, said in a note. —Associated Press contributed.
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West Texas Intermediate crude
CL00,
-0.71%
for April delivery fell 68 cents, or 0.9%, at $78.06 a barrel on the New York Mercantile Exchange after losing 1.5% on Monday.
May Brent crude
BRN00,
+0.01%
BRNK24,
+0.01%,
the global benchmark, was down 67 cents, or 0.8%, at $82.13 a barrel on ICE Futures Europe following a 0.9% loss a day earlier.
April gasoline
RBJ24,
-2.11%
shed 2.1% to $2.5309 a gallon, while April heating oil
HOJ24,
-1.63%
declined by 1.4% to $2.6091 a gallon.
Natural gas for April delivery
NGJ24,
+2.30%
traded at $1.938 per million British thermal units, up 1.2%, extending a gain of 4.4% from Monday.
Market drivers China’s growth target is seen as “ambitious,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note, observing that U.S. crude “failed to extend gains above $80 per barrel even after the Chinese stimulus bets.”
China’s official growth target for 2024 is around 5%, Premier Li Qiang said Tuesday in an annual report, as the country struggles to deal with a real estate crisis. Li said the government plans to issue 1 trillion yuan (about $139 billion) in “ultralong special treasury bonds” in 2024 and over each of the coming several years — a long hoped-for extra promise of government spending to help support flagging growth. The government also plans to provide support for debt-strapped local governments facing “economic difficulty,” he said. “While oil seems to be disappointed with the Chinese news as far as their growth targets, the reality is it’s very, very bullish,” said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “We expect that the demand in the United States and the rest of the world will exceed expectations.” Not only will we see record demand for oil, “we’re going to see a market that’s going to be undersupplied in the second half of the year,” he said. “More and more the futures spread seems to be suggesting the same thing,” said Flynn, referring to backwardation in the futures contracts. That refers to a situation where prices for oil for delivery in the near future are higher than those for later deliveries, suggesting tightness in oil supplies. Crude prices had also stumbled Monday, failing to find support after OPEC+ extended voluntary production cuts of 2.2 million barrels a day into the second quarter. “An oversupply in the second quarter should now be avoided. However, an extension for a further three months was already expected,” Carsten Fritsch, commodity analyst at Commerzbank, said in a note. —Associated Press contributed.
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