Oil drops on China's cautious growth goal as U.S. Fed concerns linger

Oil declined as China’s modest new growth ambitions and the prospect of tighter U.S. monetary policy posed headwinds for global fuel consumption.

West Texas Intermediate traded below US$79 a barrel after gaining more than 4 per cent last week. China’s Premier Li Keqiang announced a goal for growth in gross domestic product of around 5 per cent at the annual National People’s Congress on Sunday, lower than economists had expected. China, the world’s largest oil importer, ended its restrictive COVID-19 Zero policy late last year.

“The GDP forecasts from China were a rather low target and may be a potential reason for oil’s weakness today,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “But we expect China will come in a bit above target. If Chinese imports rise and Russian production falls, prices should move higher from here.”