Brent crude oil futures fell 76 cents, or 0.9%, to settle at $82.04 per barrel, falling for the fourth consecutive quarter
Oil prices dropped around 1% on Tuesday, reflecting scepticism about China’s ability to meet its economic growth targets and weakening investor risk appetite despite being supported by a weaker dollar.
Brent crude oil futures dropped 76 cents, or 0.9%, to settle at $82.04 per barrel, declining for the fourth successive quarter. U.S. West Texas Intermediate (WTI) crude oil futures dropped 59 cents, or 0.8%, to $78.15 a barrel.
Both benchmarks dropped over $1 during the session.
In order to keep prices down, China, the world’s biggest oil importer, has set an economic growth target of nearly 5% for 2024. The target is similar to last year’s target and in line with analyst expectations, but investors were disappointed by the lack of a large-scale stimulus package to support the country’s struggling economy.
The growth target is OK, but the missing part is how they want to achieve that – what sort of stimulus is unclear for now, according to UBS analyst Giovanni Staunovo.
Risk aversion in wider financial markets is also putting pressure on prices, he said. Gold prices reached a record high on Tuesday as expectations for a June rate cut in the U.S. grew, while Wall Street dropped on weakness in mega-cap stocks.
The US dollar supported crude oil prices to some extent as growth in the service sector declined. A soft dollar typically supports oil prices by increasing demand from investors holding other currencies.
Beyond that, the market is really just looking for the next headline here, with the upcoming storage reports in focus, according to Mizuho analyst Robert Yawger.
U.S. crude inventories increased 420,300 barrels in the week ending March 1, as per market observers, the first of two U.S. inventory reports released this week by the American Petroleum Institute (API), an industry group.
