Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Oil prices fell on Monday after China set a modest target for economic growth this year of about 5 percent, which is lower than market expectations, while investors cautiously await Federal Reserve Chairman Jerome Powell’s testimony before Congress this week.
Brent crude futures were trading down $1.30, or 1.5%, at $84.53 a barrel by 1210 GMT.
US West Texas Intermediate crude futures fell $1.21, or 1.5 percent, to $78.47 a barrel.
China’s growth forecast, which is being watched closely, fell short of last year’s target of 5.5 percent and came in at the lower end of expectations.
Chinese Premier Li Keqiang said on Sunday that it is necessary to consolidate the foundation of stable growth in China, and insufficient demand remains an obvious problem, and the expectations of investors and private companies are unstable.
Both benchmarks rose more than a dollar when they settled on Friday, after two sources told Reuters that a report that the UAE was considering withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) was inaccurate.
At the same time, oil prices are likely to be affected by interest rate hikes around the world as global central banks tighten policy due to fears of rising inflation. Traders are beginning to factor in interest rate increases around the world but are hoping for smaller increases than last year.
Federal Reserve Chairman Jerome Powell will testify before Congress on Tuesday and Wednesday where he is likely to be questioned on whether a larger interest rate hike is needed in the world’s largest oil consumer.
Future increases in interest rates in the United States are also likely to depend on what the February jobs report reveals on Friday, followed by the inflation report for the same month due next week.
European Central Bank President Christine Lagarde said over the weekend that it was “highly likely” that they would raise interest rates this month to curb inflation. The Australian central bank is expected to raise interest rates by 25 basis points on Tuesday.
