Oil prices continued to slide on Monday as concerns about a supply disruption from a U.S. storm receded and China’s recent stimulus package fell short of investor expectations for boosting fuel demand in the world’s second-largest oil consumer.
By 1:50 pm AEDT (2:50 am GMT), Brent crude futures had declined 36 cents or 0.5%, to US$73.51 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped 39 cents or 0.6% to $79.99 per barrel. Both benchmarks had fallen over 2% on Friday.
Oil consumption in China has been stagnant in 2024 due to slower economic growth, a shift to electric vehicles reducing gasoline demand, and a transition to liquefied natural gas (LNG) over diesel for trucking fuel. The Chinese economy’s cooling pace has tempered demand growth after years of strong expansion.
Meanwhile, U.S. supply concerns eased as the storm in the Gulf of Mexico subsided, with about 25% of offshore oil and 16.7% of natural gas production remaining offline as of Sunday, according to the U.S. offshore energy regulator.
Looking forward, policy uncertainty under U.S. President-elect Donald Trump clouds the economic outlook, although speculation about tightened sanctions on Iran and Venezuela - key oil producers - has supported recent price gains, with oil rising over 1% last week.