DTN Oil Update
Oil Futures Fell on Disappointing China Retail Sales Data
HOUSTON (DTN) -- A bearish sentiment dominated the futures oil market to start the week Monday after last week's gains due to mixed data from China confirming weaker consumption activity continues.
China's retail sales dropped to 3.0% in November, year-over-year, below 4.8% reported in October, according to China's National Bureau of Statistics on Monday.
"This was the big disappointment of the month, as retail sales failed to build upon the momentum and came in well softer than both consensus and our forecasts", said Lynn Song, chief economist at ING, in a report Monday.
In contrast, China's Consumer Price Index in November rose by 0.2%, year-on-year, down from 0.3% the previous month. â?¯
Last week at the Central Economic Work Conference, China's top leaders pledged to implement a loose monetary policy for the first time in over a decade, by increasing government spending to boost consumption and incentivizing more domestic private sector investments.
But until those measures are put into practice, the outlook of a sluggish demand from China, the largest crude importer of the world, caused OPEC to reduce its forecast of global oil demand for 2025 last week.â?¯The oil cartel expects 1.45 million barrels per day (bpd) of international demand for 2025, below 1.54 million bpd previously forecasted.
Meanwhile, in the U.S. market participants are awaiting the Federal Open Committee meeting on Dec. 18, where the Federal Reserve is expected to cut interest rates by 25 basis points after the 0.7% hike of the Consumer Price Index in November raised concerns about inflationary pressures on the U.S. economy.
At 7:55 a.m. EST, January NYMEX WTI futures edged down by $0.47 to $70.82 and February Brent future dropped $0.40 to $74.09 barrel (bbl). The front-month ULSD futures contract fell $0.0041 to $2.2659 gallon, while January RBOB for January delivery edged $0.0111 to $1.9907 gallon.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
