Oil Falls on China Slowdown Concerns

West Texas Intermediate’s discount to Brent traded at its narrowest since October, as cold weather and the start of a new pipeline supported U.S. prices, while slowing Chinese economic growth undermined Brent.

WTI was little changed. A winter storm is threatening to drop snow, ice and sleet from Utah to Pennsylvania, including as much as 8 inches (20 centimeters) in New York City. Brent, a global crude benchmark, fell as a Chinese Purchasing Managers’ Index in January dropped to a six-month, indicating that government efforts to rein in excessive credit in the world’s second-largest oil consumer will cool growth.

“The Chinese economy is slowing, in line with the new economic policy, adding pressure to most commodities this morning including oil,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “The ongoing cold snap” in the U.S. is supporting demand for heating fuel there, he said.

WTI for March delivery was up 15 cents at $97.64 a barrel in electronic trading on the New York Mercantile Exchange as of 12:40 p.m. London time. Brent’s premium to WTI contracts on the ICE Futures Europe exchange was at $8.48 a barrel, the least since Oct. 18 on an intraday basis. The spread settled at $8.91 on Jan. 31.

via Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.