Oil Prices Muted On China Gdp

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Oil Prices Muted On China Gdp

Oil Prices Muted On Weak China Q2 Gdp

Oil prices remained little changed on Monday after the release of the weak Q2 GDP from China. Additionally, the incident involving former US president Trump has also affected the oil market which is mostly muted on the first trading day of the week.

The overall data from China shows that the demand remains weak despite all the efforts from the PBoC and the Chinese government. As China is the top consumer of crude oil, any weakness from there also has profound effects on the oil prices.

Thin Trading Volumes Effect The Oil Market

Additionally, there is also a holiday in the Japanese market which is yet another reason for the thin trading volumes in the Asian session.

As of now, Brent oil futures (September) are trading at $85.10 with a 0.1% gain while the WTI futures are trading at $84.15 with a 0.1% gain. Overall, both of these contracts of oil futures have gained +0.1% for the day which is pretty good given the week's trading volumes.

The core issue that is preventing the oil prices from turning higher is the jitters from China after the release of an underwhelming GDP. We are also very close to the third plenum where Chinese officials are expected to announce new stimulus measures.

In 2024, China wants to achieve a 5.0% growth but that is now proving to be more difficult as there are a lot more headwinds for the economy.

If China announces any new stimulus package at the meeting, it will mean an increase in the domestic demand. Subsequently, it will also lead to more oil consumption and, thus, oil demand for the rest of the year 2024.

Starting from Tuesday, we will start to see some more action in oil market as today's a holiday in Japan. Over all, the oil prices will remain muted for today while normal trading volumes returning from tomorrow.

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