Oil Prices Decline Amid Lack of China Stimulus and Tensions Over Israel-Iran Conflict
Oil prices fell after China’s highly anticipated Finance Ministry briefing on Saturday failed to provide new incentives to boost consumption in the world’s largest oil importer, Bloomberg reports.
Brent crude dropped over 1%, trading toward $78 a barrel, while West Texas Intermediate (WTI) hovered around $75. The decline followed a 0.5% dip on Friday. Although China hinted at more government borrowing and promised support for its struggling property sector, the briefing did not deliver the fiscal stimulus markets had been hoping for.
The market is also being influenced by geopolitical tensions in the Middle East. A Hezbollah drone attack in Israel injured around 67 people, raising concerns about potential Israeli strikes on Iran. Reports suggest Israel is targeting military and energy infrastructure in its response to a recent missile attack from Tehran. The possibility of an escalation in the Israel-Iran conflict has heightened fears over disruptions in oil production from the Middle East, a region responsible for about one-third of global oil output.
Despite the recent dip, Brent crude has risen roughly 9% this month, largely driven by concerns over the Middle East situation. Hedge funds have responded by rapidly closing bearish positions against the crude benchmark, marking the fastest exit from short bets in nearly eight years.
While global markets continue to watch China’s economic developments and the Israel-Iran conflict closely, the volatility in oil prices is likely to persist in the near term.
