Weak Chinese Data Depresses Oil Market

As a result, Brent crude futures closed lower by 58 cents or 0.8 per cent to settle at $73.91 a barrel as the US West Texas Intermediate (WTI) crude traded at $70.71 a barrel after losing 58 cents or 0.8 per cent.

Chinese retail sales were slower than expected, pushing the need for the Chinese government to ramp up stimulus ahead of possible US trade tariffs under a second Donald Trump administration.

Retail sales, which is a gauge of consumption, grew at its weakest pace in three months at 3.0 per cent last month, much slower than a 4.8 per cent rise seen in October.

Market analysts noted that China’s economic policies have been amazingly consistent in promoting manufacturers over consumers despite clear signs of lasting weakness.

Chinese policymakers have started outlining their plans for 2025 in recent weeks, in that face that Mr Trump’s return to the White House will place considerable strain on the world’s second-largest economy.

The Chinese central bank may further cut the amount of cash that banks must hold as reserves, however, credit numbers out last week showed past easing had done little to boost borrowing.

The Chinese outlook contributed to the decision by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to postpone plans for higher output until April.

OPEC+, which pumps about half the world’s oil, planned to start unwinding cuts from October 2024 but a slowdown in global demand and rising output elsewhere forced it to postpone the plans on several occasions.

Traders also took profits while awaiting the US Federal Reserve’s decision on interest rates this week, where it is expected to cut interest rates by a quarter of a percentage point at its December 17-18 meeting.

The meeting will also provide an updated look at how much further the US central bank will likely reduce rates in 2025 and perhaps into 2026.

Lower interest rates can stimulate economic growth and increase oil demand.

Oil prices were further pressured by the US Dollar, which rose to a nearly three-week high and impacted commodities like crude oil, which is priced in the American currency.