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Oil futures fell Monday, with traders appearing underwhelmed by the 5% economic growth target set by China’s National People’s Congress.
Price action
-
West Texas Intermediate crude for April delivery
CL00,
-1.28% CLJ23,
-1.28%
fell $1.21, or 1.5%, to $78.47 a barrel on the New York Mercantile Exchange. -
May Brent crude
BRN00,
-1.27% BRNK23,
-1.27%
fell $1.28, or 1.5%, to $84.55 a barrel on ICE Futures Europe. -
Back on Nymex, April gasoline
RBJ23,
-1.04%
fell 1.3% to $2.715 a gallon, while April heating oil
HOJ23,
-1.67%
declined 2% to $2.855 a gallon. -
April natural gas
NGJ23,
-10.87%
slumped 11.3% to $2.67 per million British thermal units, giving back a big chunk of last week’s 18% rally.
Market drivers
Chinese Premier Li Keqiang, the country’s top economic official, on Sunday announced that year’s growth target was “around 5%” following the end of COVID-related controls that kept millions of people at home and triggered protests. The economy grew by only 3% last year, falling well short of the government’s 5.5% target, a miss blamed in large part on lockdowns.
See: Here’s what analysts are saying after China set its growth target at 5%
Oil-market bulls have argued that a surge in demand for crude from China, one of the world’s largest energy consumers, would help drive a rally in 2023.
“Remember, traders were thinking that the fact China has dismantled its COVID-related policies, we are going to see robust demand, but those expectations are hit today with a dose of reality,” said Naeem Aslam, chief investment officer at Zaye Capital Markets, in a note.
“In simple terms, bulls are going to struggle to push the price today,” he said.
—The Associated Press contributed to this report.
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