Oil price declines as investors let down by China’s stimulus plan

The price of WTI drops to about $68.00 in the early Asian session on Tuesday. The USD-denominated oil is impacted by the strengthening USD. Investors were let down by China’s stimulus plan, which caused the WTI price to decline. The benchmark for US crude oil, West Texas Intermediate (WTI), is now trading at about $68.00 on Tuesday. Amid worries about Chinese demand growth and the possibility that a Trump administration could start a tariff-led trade war, the WTI price is edging down.

The WTI prices can still be impacted by Donald Trump’s victory in the US presidential election. Trump has declared his plan to apply extra tariffs on up to 60% of Chinese goods and a general tariff of 10% to 20% on all imports. Economic growth would also probably be hampered by a fresh trade conflict with China.

The WTI’s decline is exacerbated by the stronger US dollar. The US Dollar Index (DXY), which compares the value of the USD to a basket of other currencies, rises to new four-month highs of about 105.70 in the meantime. This raises the price of oil denominated in USD. Nonetheless, the Greenback’s profit-taking may temporarily limit the black gold’s decline.

Friday’s announcement of Beijing’s most recent stimulus package did not meet market expectations. Concerns regarding demand growth in the world’s second-largest oil consumer were also raised by statistics released over the weekend that revealed that, in October, producer price deflation deepened while consumer prices in China increased at the slowest rate in four months.