Oil prices dropped this morning after China announced that it was setting its economic growth target for this year at around 5%, which was below market expectations of 5.5%. China, which is the second-largest consumer of oil globally, disappointed the market with its lower-than-expected GDP target, causing oil prices to fall.
In Asian trading hours, WTI crude futures dropped 46 cents, or 0.6%, to $79.22 a barrel, while Brent crude futures fell 50 cents, or 0.6%, to $85.33 a barrel.
China’s economic growth outlook is lower than last year’s target of 5.5%, and it is at the lower end of the forecast range. A policy source stated that China may set its GDP target as high as 6%. Premier Li Keqiang emphasized the need to strengthen the foundation for steady growth in China and stated that demand was still a clear problem while the expectations of private investors and the business sector remained uncertain.
The drop in oil prices is likely to be influenced by global interest rate hikes as central banks worldwide tighten monetary policy due to increasing concerns about inflation.
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Monday, March 6, 2023