Crude Oil holds $70.00 as weak Chinese data sparks demand concerns
- WTI price declines to near $69.70 in Wednesday’s early Asian session
- Chinese economic data stoked concerns about demand, weighing on the WTI price
- US crude inventories fell by about 4.7M barrels last week, the API showed
The US crude oil benchmark, West Texas Intermediate (WTI), is currently trading at approximately $69.70 on Wednesday. The price of WTI is gradually declining in response to the resurgence of apprehension regarding Chinese demand. Investors continue to exercise caution in anticipation of the interest rate decision by the United States Federal Reserve (Fed) on Wednesday.
The lacklustre consumer spending in China, the world’s largest oil importer, was a cause for concern as a result of the disappointing Chinese Retail Sales. Robert Yawger, director of the energy futures division at Mizuho Securities USA, observed that the China data had generated bearish momentum, which effectively shattered any aspirations speculators had of breaking out of the two-month range to the upside.
On Wednesday, oil merchants anticipate the Federal Reserve’s final policy meeting of the year. The market has already factored in a 25 basis points (bps) reduction in interest rates; however, the Federal Reserve’s forward guidance on rate policy for 2025 and 2026 will be the primary focus. The Greenback could be bolstered and the USD-denominated commodity price could be dragged lower if the Fed exhibits any indications of a less aggressive easing cycle.
The WTI’s losses may be mitigated by a decrease in US crude inventories that occurred last week. The weekly report from the American Petroleum Institute (API) in the United States indicated that crude oil inventories in the country decreased by 4.7 million barrels for the week ending December 13, in contrast to a 499,000 barrel increase the previous week. The market consensus predicted that the number of barrels in circulation would decrease by 1.85 million.
