Commodities
Oil dips on faltering Chinese economy
© Reuters. The sun sets behind the chimneys of the Total Grandpuits oil refinery, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann
By Natalie Grover
LONDON (Reuters) -Oil prices fell on Wednesday, pressured by lacklustre economic activity in leading crude importer China, but a first monthly gain since September remained in sight as flaring tensions in the Middle East heightened supply concerns.
futures for March, which expire today, fell 87 cents, or about 1.1%, to $82 a barrel by 1103 GMT. The more actively traded April contract fell 80 cents, or about 1%, to $81.70.
U.S. West Texas Intermediate crude futures lost 82 cents, or roughly 1.1%, to $77 a barrel.
Manufacturing activity in China, the world’s second-largest economy, contracted a fourth straight month in January, an official factory survey showed on Wednesday.
The latest sign of the country’s broader economy struggling to regain momentum came days after a court ordered the liquidation of troubled property developer China Evergrande (HK:). The real estate sector accounts for a quarter of China’s GDP.
Major forecasters, including the Organization of the Petroleum Exporting Countries (OPEC), see oil demand growth in 2024 driven primarily by Chinese consumption.
“The factory data confirms our view that China, at least for now, is an impediment to global oil demand growth,” said Tamas Varga of oil broker PVM.
The Israel-Hamas war, meanwhile, has expanded to a naval conflict in the Red Sea between the United States and Iran-aligned Houthi militants.
While that has disrupted oil and tanker shipping, which is driving up delivery costs and starting to affect oil supplies, a Reuters poll suggested that record production in the West and slow economic growth will keep a lid on prices and limit any geopolitical risk premium.
“The main issue with turning outright bullish on here is the technical picture remains bearish and is yet to catch up with recent events,” including a deadly drone attack on U.S. troops near the Jordan-Syria border last week, said IG market analyst Tony Sycamore.
Yemen’s Iran-aligned Houthi group on Wednesday said it would keep up attacks on U.S. and British warships in the Red Sea in what it called acts of self defence, stoking fears of long-term disruption to global trade.
Meanwhile, Israel’s offensive in Gaza persisted, though Palestinian militant group Hamas said it was studying a new proposal for a ceasefire and release of hostages in Gaza.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
By Paul Carsten
LONDON (Reuters) – Oil prices edged up on Monday in thin holiday trade at the end of the year, as traders awaited more Chinese and U.S. economic data later this week to assess growth in the world’s two largest oil consumers.
futures rose 20 cents to $74.37 a barrel by 1208 GMT. The more active March contract was at $74.00 a barrel, up 21 cents.
U.S. West Texas Intermediate crude gained 27 cents to $70.87 a barrel.
Investors are eyeing China’s PMI factory surveys due on Tuesday and the U.S. ISM survey for December to be released on Friday.
Both Brent and WTI rose about 1.4% last week buoyed by a larger-than-expected drawdown from inventories in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand. [EIA/S]
Available capacity at U.S. oil refiners is expected to decrease by 108,000 bpd in the week ending Jan. 3, research company IIR Energy said on Monday.
Oil prices were also supported by optimism for Chinese economic growth next year that could lift demand from the top crude oil importing nation.
To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025, Reuters reported last week.
“Global oil consumption reached an all-time high in 2024 despite China underperforming expectations, and oil stockpiles are heading into next year at relatively low levels,” said Ryan Fitzmaurice, senior commodity strategist at Marex.
“Going forward, China economic data is expected to improve as the recent stimulus measures take hold in 2025. Also, lower rates in the U.S. and elsewhere should be supportive of oil consumption.”
Separately, the World Bank has raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would remain a drag next year.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
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