Oil prices fell on Tuesday after weak data from China, the largest importer of crude oil, raised doubts about the extent of the recovery in the world’s second-largest economy.
Crude oil fell 0.7% to $79.72, while Brent fell 0.7% to $85.58.
Trade data released on Tuesday; It showed that Chinese imports fell more than 10% year-on-year in February, below expectations, and domestic demand remained weak.
More specifically, crude oil imports decreased by 1.3% year-on-year in the first two months of 2023.
“The latest China oil trade data points to weaker domestic demand that could weigh on sentiment in the short to medium term if imports do not recover,” ING analysts wrote in a note. said.
Ahead of these data, Chinese government officials announced over the weekend their lowest economic growth target in more than 30 years for 2023, and disappointed investors after last week’s impressive business activity figures boosted expectations.
However, losses were limited as investors hesitated to take strong positions ahead of Fed Chairman Jeremy Powell’s two-day presentation, which will begin later in the session.
Powell’s colleagues tend to emphasize that the U.S. central bank must continue to raise interest rates to combat inflation, and the dollar will likely rise if this hawk keeps talking, Powell said.
But at his last press conference, the President spoke of “disinflation” and may try to soften the overall hawk tone to give the Fed more flexibility to pursue policies he deems necessary.
This will weaken the US dollar.
The US stock data, which will be released on Tuesday by the American Petroleum Institute (API), will also be of interest.
Crude inventories increased by over 6 million barrels last week, but analysts now expect a pause in the latest series of increases in domestic inventories.