Brent crude futures declined 17 cents, or 0.2 per cent, at $75 a barrel and U.S. West Texas Intermediate crude tumbled 24 cents, or 0.3 per cent, at $71.32 per barrel
Oil prices dropped on Wednesday as investors reassessed the ability of China’s stimulus plans to boost the economy enough to drive more fuel demand growth in the world’s biggest crude importer.
Brent crude futures declined 17 cents, or 0.2 per cent, at $75 a barrel by 0415 GMT. U.S. West Texas Intermediate (WTI) crude tumbled 24 cents, or 0.3 per cent, at $71.32 per barrel.
Prices gained around 1.7 per cent on Tuesday after China announced its most aggressive economic stimulus since the COVID-19 pandemic, with interest rate cuts and government funding.
Analysts, however, warned that more fiscal help was needed to boost confidence in the world’s second-largest economy and that eroded the initial impact on oil prices.
The lack of a more concrete fiscal approach still instils some reservations over whether the economic boost can be sustained, according to Yeap Jun Rong, market strategist at IG.
Yeap said there is an overall lack of traction to the oil market, with trades lower than usual, which is likely also due to a decline in U.S. consumer confidence. It dropped in September to its lowest on three years, with particular concern about the availability of jobs.
Still, declining U.S. crude oil and fuel stockpiles provided some support for the market, which has generally risen since prices slumped to their lowest since 2021 on September 10.
U.S. oil stockpiles stumbled by 4.34 million barrels last week while gasoline inventories skidded by 3.44 million barrels and distillate stocks slipped by 1.12 million barrels, as per market sources citing American Petroleum Institute (API) figures on Tuesday.
