Oil prices on Monday wiped out nearly all gains made last week after data showed China’s inflation rate declined and a lack of clarity on the country’s economic stimulus plans stoked fears about fuel demand in the world’s biggest crude importer.
Brent crude futures fell $1 to $78.04 per barrel by 0649 GMT, while U.S. West Texas Intermediate crude futures also fell $1, or 1.3%, to $74.56 per barrel.
Both benchmarks gave up all their gains from last week, falling by more than 1.5% a barrel earlier on Monday, before recovering some ground. Brent gained 99 cents last week, while WTI climbed $1.18.
China’s deflationary pressures worsened in September, according to official data released on Saturday, and a press conference the same day left investors guessing about the overall size of a stimulus package to revive fortunes in the world’s second-largest economy.
The negative news from China outweighed market concerns over the lingering possibility an Israeli response to Iran’s Oct. 1 missile attack could disrupt oil production, though the U.S. has cautioned Israel against targeting Iranian energy infrastructure.
“Consumer prices index reading from China indicates a sustained deflationary trend and weaker domestic consumption despite the announcement of the most aggressive monetary stimulus by authorities in September,” Priyanka Sachdeva, an analyst at Phillip Nova, said in a note on Monday.
SOURCE: REUTERS
