Nov 12, 2024 (MENAFN via COMTEX) --
(MENAFN - The Rio Times) Oil prices experienced a notable drop of over 2% on Monday, largely due to investor disappointment with China's latest stimulus plan.
This plan failed to meet expectations for increased demand from the world's second-largest oil consumer, while global supply appears set to rise in 2025.
Brent crude futures settled at $71.83 per barrel, reflecting a decrease of $2.04, or 2.76%. Meanwhile, West Texas Intermediate (WTI ) futures closed at $68.04 per barrel, down by $2.34, or 3.32%. Both benchmarks had already fallen more than 2% on Friday.
Phil Flynn, a senior analyst at Price Futures Group, noted that the recent U.S. elections and Donald Trump's victory could continue to influence the oil market .
Flynn remarked that Trump's campaign promise of "drill, baby, drill" has somewhat diminished the motivation for purchasing oil.
Additionally, the U.S. Dollar index, which measures the dollar's value against a basket of foreign currencies, slightly surpassed its highs observed immediately after last week's presidential election.
Economic Pressures and Global Market Dynamics
Markets are still seeking clarity on future U.S. policy direction. A stronger dollar makes commodities priced in U.S. currency, such as oil, more expensive for holders of other currencies, often exerting downward pressure on prices.
In China, consumer prices rose at their slowest pace in four months during October. Simultaneously, producer price deflation deepened despite Beijing's efforts to bolster its struggling economy through increased stimulus measures.
Achilleas Georgolopoulos, a market analyst at XM brokerage, highlighted the ongoing weakness in Chinese inflation numbers. He noted concerns about deflation as the annual change in the producer price index fell further into negative territory.
The overall economic momentum in China remains negative. As these developments unfold, investors continue to navigate a complex landscape influenced by both domestic policies and global economic conditions.
The interplay between demand expectations and supply dynamics will remain critical in shaping future oil price movements.
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COMTEX_459725018/2604/2024-11-12T10:15:40
