Oil prices weakened early Friday following China’s refusal to perfect an economic growth plan for this year, stoking fears that the impact of the coronavirus pandemic, which broke out in the Republic in December, might hurt fuel demand in the world’s biggest oil consumer after the U.S.
Brent crude had depressed by $1.88 or 5.21% to $34.18 per barrel as of 08:26 West African Time, reversing the almost 1% gain posted at the previous session.
U.S. West Texas Intermediate fell by $2.21 or 6.52% to $31.71 a barrel, having nudged $30.72 earlier.
Bonny Light, the premium grade in Nigeria’s oil basket, appreciated by $0.37 or 1.09% to $34.46 on Thursday but it is hugely probable that it will fall during the day, given the fate that has befallen the above two global benchmarks.
Over the past couple of weeks, oil prices have posted a steady rise after the record drop of U.S. oil to below zero sometime last month.
Nevertheless, market expectations were upended by China’s inaction as regards fixing an economic target for 2020 as its National People’s Congress began a meeting that would span a week.
Stephen Innes, AxiCorps’s chief global market strategist told Reuters leaving the growth target “could be interpreted as putting less focus on infrastructure investment and could be viewed as negative for oil.”
“The commodity market, in general, was looking for a bigger infrastructure pump from the NPC so there is bound to be an element of disappointment,” he added.
One trillion yuan ($140 billion) of special treasury bonds is being planned however by Beijing as stimulus for firms and provinces affected by the pandemic.