Oil down on China outlook, spotlight on Powell testimony

 
INA-sources
 
Oil prices opened lower on Monday after China set a lower-than-expected target for economic growth this year at around 5%, and as investors cautiously awaited U.S. Federal Reserve Chair Jerome Powell's testimony this week.
 
Brent crude futures were trading down 58 cents, or 0.7%, at $85.25 a barrel at 0340 GMT. U.S. West Texas Intermediate (WTI) crude futures were also down 0.7%, at $79.12 a barrel.
 
"Crude remains in a tug-of-war between optimism over Chinese reopening and nervousness over a hawkish Fed hurting the U.S. economy," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
 
China's closely watched growth outlook, announced on Sunday, was lower than its 5.5% gross domestic product (GDP) growth target last year. GDP grew last year by just 3%. Policy sources had told Reuters a range as high as 6% could be set for 2023.
 
Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated, insufficient demand remained a pronounced problem, and the expectations of private investors and businesses were unstable.
 
However, analysts at UBS Investment Bank upgraded their forecasts for China's GDP growth to 5.4% for 2023 and to 5.2% for 2024 from 4.9% and 4.8% respectively.
 
"Economic re-opening is proceeding better than we had expected earlier – the feared 'second-wave' of COVID did not materialize and there was little sign of supply disruptions," Tao Wang, Head of China economic research at UBS Investment Bank, said in a note.
 
Source: Reuters