Oil Prices Steady as China’s Economic Stimulus Fades, Inventory Data Supports Market
By Laila Kearney
Oil prices stabilized on Wednesday following a previous session of gains driven by diminishing enthusiasm for China’s economic stimulus, the world’s largest crude importer. However, support for the market was provided by an industry report showing a decline in crude and fuel inventories.
Brent crude futures edged up 3 cents to $75.20 a barrel by 0004 GMT, while U.S. West Texas Intermediate crude slipped 2 cents to $71.58 per barrel.
The market saw a 1.7% increase on Tuesday after China’s announcement of its most aggressive economic stimulus since the COVID-19 pandemic, involving interest rate cuts and government funding. Despite this, analysts cautioned that additional fiscal support was necessary to instill confidence in the world’s second-largest economy, tempering the initial impact on oil prices.
However, the market found some support from decreasing U.S. crude oil and fuel stockpiles, which have been on the rise since prices hit their lowest point in 2021 on September 10.
U.S. oil inventories fell by 4.34 million barrels last week, with gasoline stocks dropping by 3.44 million barrels and distillate stocks decreasing by 1.12 million barrels, according to reports from the American Petroleum Institute on Tuesday.
Additionally, escalating tensions in the Middle East between Iran-backed Hezbollah in Lebanon and Israel boosted crude prices, as cross-border rocket launches from both sides heightened fears of a broader conflict in the crucial producing region.
Hezbollah confirmed on Wednesday that senior commander Ibrahim Qubaisi was killed in Israeli airstrikes on the Lebanese capital, with Israel stating that Qubaisi led the group’s missile and rocket force.
Meanwhile, a hurricane threatening the U.S. Gulf Coast has shifted course towards Florida, diverting away from oil and gas-producing regions near Texas, Louisiana, and Mississippi.