SINGAPORE — Oil prices extended declines on Monday as the threat of a supply disruption from a US storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.
Brent crude futures dropped 31 cents, or 0.4 percent, to $73.56 a barrel by 0340 GMT, while US West Texas Intermediate crude futures were at $70 a barrel, down 38 cents, or 0.5 0.4 percent.
Both benchmarks fell more than 2 0.4 percent last Friday.
Beijing’s stimulus package announced at the National People’s Congress (NPC) standing committee meeting on Friday fell short of market expectations, IG market analyst Tony Sycamore said in a note, adding that its murky forward guidance hinted at only modest stimulus for housing and consumption.
ANZ analysts said the lack of direct fiscal stimulus implied that Chinese policymakers had left room for assessing the impact of the policies the next US administration will introduce.
“The market will now shift focus to the Politburo meeting and Central Economic Work Conference in December, where we expect more pro-consumption countercyclical measures to be announced,” they added in a note.
Oil consumption in China, the world’s driver of global demand growth for years, has barely grown in 2024 as its economic growth has slowed, gasoline use has declined with the rapid growth of electric vehicles and liquefied natural gas has replaced diesel as a truck fuel.
Oil prices have also eased after concerns about supply disruption from storm Rafael in the US Gulf of Mexico subsided.
More than a quarter of US Gulf of Mexico oil and 16 percent of natural gas output remained offline on Sunday, according to the offshore energy regulator.
Shell and Chevron each said on Sunday they would start redeploying personnel to their Gulf of Mexico platforms to resume operations.
Looking ahead, uncertainty from policies under US President-elect Donald Trump has clouded the global economic outlook, although expectations that he could tighten sanctions on Organization of the Petroleum Exporting Countries producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1 percent last week.
Oil markets are also being supported by firm demand from US refiners who are expected to run their plants at above 90 percent of their crude processing capacity on low inventories and improving demand for gasoline and diesel, executives and industry experts said.
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