The global crude oil market is experiencing a downturn as China set a lower-than-expected target of 5% economic growth this year. Investors are closely monitoring the market’s response to this news, while also awaiting the US Federal Reserve Chairman Jerome Powell’s statements in the coming days.
Brent futures and US West Texas Intermediate crude futures both experienced declines, with Brent futures falling by $1.05 or 1.2% to $84.78 a barrel and US West Texas Intermediate crude futures falling by 93 cents or 1.2% to $78.75 a barrel.
China’s GDP target for this year falls below the previous year’s 5.5% target and is on the lower end of expectations. In 2022, Chinese GDP grew by only 3%. Premier Li Keqiang expressed concerns about the need to consolidate the foundation for stable growth in China, the persistent issue of insufficient demand, and volatile expectations from private investors and businesses.
In recent days, crude benchmarks had initially risen by more than $1 after two sources contacted by Reuters denied reports of the United Arab Emirates (UAE) considering leaving OPEC. However, the current scenario of China’s GDP forecast and the likelihood of global central banks tightening their monetary policies to counter rising inflation are expected to impact crude oil prices.
US Federal Reserve Chairman Jerome Powell’s upcoming testimony in Congress tomorrow and Wednesday is expected to address the need for bigger hikes in the US, which is the world’s largest oil consumer. Hence, the global crude oil market is closely monitoring these developments.
