Oil prices experienced a notable drop of over 2% on Monday, largely due to investor disappointment with Chinas latest stimulus plan.This plan failed to meet expectations for increased demand from the worlds second-largest oil consumer, while global supply appears set to rise in 2025.Brent crude futures settled at $71.83 per barrel, reflecting a decrease of $2.04, or 2.76%.
Meanwhile, West Texas Intermediate (WTI) futures closed at $68.04 per barrel, down by $2.34, or 3.32%.
Both benchmarks had already fallen more than 2% on Friday.Phil Flynn, a senior analyst at Price Futures Group, noted that the recent U.S.
elections and Donald Trumps victory could continue to influence the oil market.Flynn remarked that Trumps campaign promise of drill, baby, drill has somewhat diminished the motivation for purchasing oil.Oil Prices Decline Amid Disappointment Over Chinese Stimulus.
(Photo Internet reproduction)Additionally, the U.S.
dollar index, which measures the dollars value against a basket of foreign currencies, slightly surpassed its highs observed immediately after last weeks presidential election.Economic Pressures and Global Market DynamicsMarkets are still seeking clarity on future U.S.
policy direction.
A stronger dollar makes commodities priced in U.S.
currency, such as oil, more expensive for holders of other currencies, often exerting downward pressure on prices.In China, consumer prices rose at their slowest pace in four months during October.
Simultaneously, producer price deflation deepened despite Beijings efforts to bolster its struggling economy through increased stimulus measures.Achilleas Georgolopoulos, a market analyst at XM brokerage, highlighted the ongoing weakness in Chinese inflation numbers.
He noted concerns about deflation as the annual change in the producer price index fell further into negative territory.The overall economic momentum in China remains negative.
As these developments unfold, investors continue to navigate a complex landscape influenced by both domestic policies and global economic conditions.The interplay between demand expectations and supply dynamics will remain critical in shaping future oil price movements.