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, -1.27% CL.1, -1.27% CLJ23, -1.27% fell $ 1.21, or 1.5%, to $ 78.47 a barrel on the New York Mercantile Exchange.
- May Brent crude BRN00, -1.23% BRNK23, -1.23% fell $ 1.28, or 1.5%, to $ 84.55 a barrel on ICE Futures Europe.
- Back on Nymex, April gasoline RBJ23, -1.01% fell 1.3% to $ 2.715 a gallon, while April heating oil HOJ23, -1.75% declined 2% to $ 2.855 a gallon.
- April natural gas NGJ23, -12.60% 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.