Oil Swings Near $76 as Traders Digest China Stimulus Plans

Oil switched between gains and losses after China began a gradual roll-out of measures to aid its economy.

(Bloomberg) — Oil switched between gains and losses after China began a gradual roll-out of measures to aid its economy. 

Brent futures were little changed, after earlier adding as much as 1.4%. 

While Chinese banks reduced their benchmark lending rates on Tuesday, the country’s gradual roll-out of broader measures for its ailing economy is fueling a debate among traders over how far authorities will go to aid growth. The market for crude in Asia has firmed in recent days on a flurry of buying by a giant Chinese refiner, though the country’s biggest oil and gas producer cut its demand forecast for this year. 

Oil has struggled for direction in recent weeks. A flood of supply from Russia and Iran has kept availability of crude elevated. Last month, China imported a record volume of oil from Russia and the cargo-transfer hub of Malaysia.

Read More: Russian Oil Flows Edge Lower But Evidence of Cuts Remains Scant

Coupled with slowing global growth as central banks hike rates to quell too-hot inflation, prices have generally been pressured this year. To try to arrest the drop, the Organization of Petroleum Exporting Countries and its allies have scaled back production.

“Worries about the Chinese growth are tangible,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “Unless concrete signs of global stock depletion emerge, the market is likely to stay stuck in its current range.”

Supplies from the Middle East were also in focus. Iraqi and Turkish officials had been due on Monday to discuss a possible resumption of piped Iraqi oil flows through to the port of Ceyhan. The conduit can carry 500,000 barrels a day.

To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.

–With assistance from Sharon Cho.

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.