Oil falls on China demand worries, held up by Middle East conflicts

ANKARA

Oil prices dropped on Tuesday amid concerns that China's recent incentive packages may fall short of reviving economic activity, while ongoing conflicts in the Middle East keep prices from falling further.

Brent crude, the international benchmark, fell 0.3% to $73.52 per barrel at 10:07 a.m. local time (0707 GMT), down from the previous session's close of $73.74. The US benchmark West Texas Intermediate (WTI) also declined by 0.3%, trading at $69.50 per barrel, compared to $69.75 in the prior session.

Earlier this month, China, the world's largest oil importer, announced a stimulus package aimed at addressing ongoing issues in the real estate sector. However, experts believe the measures failed to meet sector expectations. The government introduced a 25-basis-point reduction in 1- and 5-year loan interest rates, which serve as benchmarks for corporate and real estate loans.

The contraction in China's real estate and housing markets—both crucial for economic growth—has weighed on oil prices, with analysts predicting lower demand from the country. The impact of the stimulus on the sector's recovery will become clearer as data emerges in the coming months, though challenges remain a significant concern for China's economy.

Meanwhile, in northern Gaza, Israel continues its relentless attacks, despite international calls for a ceasefire. Early Tuesday, at least 20 Palestinians were killed in two separate Israeli airstrikes. Witnesses reported that drones surrounded the Khalifa Bin Zayed School, with officials warning they would target anyone who failed to evacuate.

Fears of a broader regional war, which could disrupt key oil supply routes, continue to limit further declines in oil prices.