Duygu Alhan
17 October 2024•Update: 17 October 2024
ANKARA
Oil prices decreased on Thursday due to concerns that China's economy will not grow at the expected pace, while data pointing to an increase in demand in the US and the ongoing conflicts in the Middle East limited the price decline.
The international oil benchmark of Brent crude dropped 0.7% to $73.71 per barrel at 10.30 am local time (0730 GMT), down from the previous session's close of $74.21.
The US benchmark West Texas Intermediate also declined by 0.7% to $69.60 per barrel, compared to $70.12 at the prior session's close.
Concerns that the incentives announced this month to stimulate the economy in China are insufficient to continue to put pressure on oil prices.
According to the stimulus package for the real estate sector announced Thursday in the world's top oil importing country, the government has increased the loan quota for companies that meet the conditions to 4 trillion yuan in order to stop the decline in the real estate sector.
Analysts stated that the stimulus package announced for the ongoing problems in the real estate sector in China will have a positive effect, however, the incentive does not meet the expectations of the sector.
On the other hand, the data which indicates that crude oil stocks in the US fell contrary to expectations, limits further price falls.
Data from the American Petroleum Institute (API) released late on Wednesday showed a decrease of 1.58 million barrels in US commercial crude oil inventories, contrary to market expectations of a 3.2 million barrel rise. The reserve drop reflected market perceptions of strengthening domestic demand, supporting upward price movements.
Official figures from the Energy Information Administration (EIA) are scheduled for later in the day. If a rise in crude oil inventories is confirmed, prices are likely to climb.
Meanwhile, escalating tensions in the Middle East, a region responsible for much of the world’s oil production, continue to influence upward price movements by fueling market players' supply fears.
The Lebanese group Hezbollah said on Thursday that its fighters destroyed two Israeli tanks in southern Lebanon’s Labbouneh Heights, inflicting casualties on the soldiers.
According to separate statements, the Hezbollah fighters used two guided missiles to target two Merkava tanks in the Labbouneh Heights, causing them to burn and killing or injuring soldiers. The Israeli army has yet to comment on the Hezbollah statement.
