Oil prices experienced a notable decline on Wednesday, primarily driven by disappointing Chinese economic growth data, raising concerns about demand growth in the world’s largest consumer of oil. By 09:10 ET (14:10 GMT), U.S. crude futures were trading 2.5% lower at $70.68 a barrel, while the Brent contract dropped 2.2% to $76.61 a barrel. Chinese gross domestic product (GDP) for the fourth quarter grew at a rate of 5.2% year-on-year, slightly below expectations. Despite surpassing the government’s 5% target for 2023, the growth was influenced by a lower base for comparison from the previous year, signaling a sluggish post-COVID recovery. This weaker-than-expected GDP reading set a subdued tone for Chinese economic growth in 2024, implying a potential decrease in crude oil appetite in the coming months. Although Chinese oil imports reached record highs in 2023, the growth rate tapered off towards the end of the year, partly due to elevated inventory levels. Another factor contributing to the downward pressure on the crude market was the strengthening U.S. dollar, which reached a one-month high overnight. This surge was fueled by Federal Reserve Governor Christopher Waller’s indication that the central bank was not currently considering interest rate cuts in the near term.
Oil Prices Witness Sharp Decline on Disappointing Chinese Growth Data and Strengthening Dollar
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