Oil Prices Subdued On Weak Cpi

last updated on

Oil Prices Subdued On Weak Cpi

Oil Prices Subdued On Weak Chinese Cpi

sharp decline was recorded in the Oil prices on Monday after the release of a weak Chinese CPI. The data showed that the deflation trend in China remains strong despite all the fiscal stimulus packages.

Also, the stimulus package from China has failed to impress the investors. As a result of this development, investors are now worried about the oil demand in China, which is among the top importers.

Brent Oil Futures Decline By 1.8%

Brent Oil futures (December) are currently trading at $77.65, with a 1.8% decline. Meanwhile, the WTI futures are trading at $73.54, with a 1.8% decline.

The Organization of Petroleum Exporting Countries (OPEC) report for the month is also due, which could provide insights into the supply.

However, the bottom line is that the disinflation trend remains strong in China while the fiscal stimulus is underwhelming at best.

The data from China showed that producer inflation has remained in contraction for 2 years in a row. Also, the CPI showed some easing in September, which was not a surprise to anyone.

The reading has made it clear that oil demand in China will remain weak as long as a weaker CPI remains. Also, China has failed to announce a fiscal stimulus that is big enough, which has made things more difficult.

Right now, the market is mostly underwhelmed as everyone is now tired of China's slow approach to economic support.

In September, China announced some measures to support the economy, but even that effect has now worn out. It has been a while since China became a major contention point for the oil markets.

After all, economic problems in China can also have long-lasting effects on the oil market. The two biggest issues in China right now are deflation and a weaker CPI.

At this stage, the only thing that can support the oil prices is more cuts from the OPEC and the OPEC+.

Trending Stories