Oil prices lose all gains made last week after China fails to disclose size of fiscal package

Oil prices fell on Monday, erasing almost all of the gains made last week after official data showed that China’s inflation rate had plunged. The economy revealed an additional stimulus package to help revive domestic industry, but authorities did not disclose any details on the scale of the tax measures.

It also raised concerns about fuel demand in China, which is also the world’s largest crude importer, Reuters reported. Brent crude futures slipped $1 to $78.04 a barrel Monday afternoon, while U.S. West Texas Intermediate crude futures also fell $1 to $1.3 percent, at $74.56 per barrel.

Both benchmarks erased their gains made last week, falling more than 1.5 percent a barrel before recovering somewhat. Deflationary pressures in China notably worsened in September, according to official data published on Saturday.

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This news from China sparked more concerns in the market after investors expressed concerns about Israel’s possible response to Iran and its impact on oil production. In a note published on Monday, Priyanka Sachdeva, analyst at Phillip Nova, explained: “China Consumer Price Index readings indicate a sustained deflationary trend and weaker domestic consumption despite the announcement of stimulus measures most aggressive monetary policy by the authorities in September. »

The consumer price index failed to meet market expectations and the producer price index fell at the fastest pace seen in six months, falling 2.8 percent on an annual basis , revealed the National Bureau of Statistics of China.

Tony Sycamore, market analyst at IG, called Saturday’s Chinese Finance Ministry briefing a “fiasco,” according to the report. The analyst noted: “The fiscal measures needed to eliminate downside risks to growth and ignite the animal spirits of Chinese consumers are conspicuous by their absence. »

Also read: Chinese consumer inflation slows in September even as deflationary pressures build