Oil fell as broader risk-on sentiment overshadowed news of China’s gradual rollout of stimulus measures to help its economy.
Global benchmark Brent settled below $76 with traders shunning risk assets. Chinese banks cut their benchmark lending rates on Tuesday, but the country’s gradual rollout of broader measures for its struggling economy is fueling a debate among traders over how far authorities will go to help growth .
“This shortened week looks like it could be an ugly week for oil,” said Ed Moya, senior market analyst at Oanda Corporation. Risk aversion appears to have returned to the market amid signs that China’s recovery will struggle due to limited stimulus, he said.
The physical crude market in Asia has strengthened in recent days on a buying spree by a giant Chinese refiner, even as the country’s biggest oil and gas producer cut its forecast for demand for this year.
Oil has struggled for direction in recent weeks. A flood of supply from Russia and Iran has kept crude availability high. Ample supply, along with central bank hikes, has generally pressured prices this year. To try to stop the decline, the Organization of the Petroleum Exporting Countries and its allies have cut production.
Prices:
- WTI for August delivery fell 74 cents to $71.19 a barrel in New York.
- July WTI expired on Tuesday at $70.50 a barrel.
- There was no fix on Monday due to a holiday in the United States
- Brent for August settlement fell 19 cents to settle at $75.90 a barrel
