Oil prices retreated as China lowered its key interest rates by less than expected.
Tuesday’s decline in oil prices followed China’s decision to cut its benchmark lending rates by less than anticipated, raising further concerns about the expectations of oil demand in the world’s largest crude importer.
Brent crude fell 5 cents to $76.04 per barrel at 03:10 GMT. US crude for July delivery dropped 99 cents from Friday’s close to $70.79. The July contract expires at the end of Tuesday’s session.
The more actively traded August US crude contract declined by 71 cents to $71.22 per barrel. There was no settlement for US crude on Monday due to a public holiday in the United States.
Earlier yesterday, China reduced two of its benchmark lending rates – the one-year and five-year loan prime rates – by ten basis points each.
The rate cut, the first in ten months, was milder than expected, as analysts had anticipated a reduction of 15 basis points in the five-year lending rate.
The rate cut came after recent economic data showed that the retail and manufacturing sectors struggled to maintain the momentum achieved earlier in the year.
The Chinese government held a meeting last week to discuss measures to stimulate economic growth. Several central banks have lowered their economic growth forecasts 2023 amid concerns of a faltering recovery after COVID-19.
On the supply side, Iran’s crude oil exports and production have reached new highs in 2023 despite US sanctions.
Russia is set to increase its diesel fuel and seaborne liquefied petroleum gas exports this month, surpassing cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Moscow.
JPMorgan has lowered its average estimate for Brent crude oil prices to $81 per barrel this year from a previous forecast of $90.
The bank’s analysts stated that the “OPEC+” cuts are insufficient to balance global supply and demand, even if extended until 2024.
Oil prices have advanced in today’s trading session. WTI increased to $71.83/barrel, while BRENT crude is currently trading at $76.73/barrel at the time of writing.
Digital currencies rise, but Bitcoin remains below $27,000.
Digital currencies rose during Tuesday’s trading, but Bitcoin remained below the $27,000 level after
China’s failure to lower its key lending rate dampened market sentiment.
Bitcoin increased by 0.28% to $26,743 at 08:56 GMT, according to Coinbase data.
The second-largest digital currency, Ethereum, rose by 0.22% to $1,725.24, while Ripple declined by 2.1% to $0.4828.
Meanwhile, the International Monetary Fund (IMF) is developing a platform that allows for the settlement of digital currencies among central banks, according to IMF Managing Director Kristalina Georgieva.
Futures contracts for gold declined by approximately $6.
Gold prices fell in Tuesday’s trading, despite the dollar’s stability, as market participants awaited the testimony of the Federal Reserve Chairman before Congress on Wednesday and Thursday to gain insights into the future path of interest rates.
China lowered its key lending rate as expected, as officials seek to support the slowing economic growth after the “COVID-19” era.
August futures contracts for the yellow metal dropped by 0.32% or $6.3 to $1,964.9 per ounce, while the spot price remained stable at $1,954.80. Silver futures contracts declined by 0.54% or 13 cents to $23.99 per ounce, and the spot price for immediate platinum delivery decreased by 0.31% to $971.00.
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