Oil prices are falling; China Stimulus, Trump Impact Victory Focus By Investing.com

Investing.com – Oil prices fell on Thursday, extending the previous session’s declines on the back of a strong dollar and lower oil imports from China.

At 08:45 ET (1345 GMT), the price fell 0.2% to $74.82 a barrel and 0.4% to $71.46 a barrel.

Crude oil prices pared some losses from the previous session after Donald Trump’s 2024 election victory sent the dollar soaring to a four-month high, weighing on oil markets.

China’s NPC meeting awaits fiscal signals

China’s National People’s Congress meets for four days this week and is expected to outline plans to increase fiscal spending in the coming months to boost economic growth.

The world’s largest oil importer is struggling with a prolonged slowdown and is expected to post a sharp increase in fiscal spending. Over the past month, Beijing has announced a series of aggressive stimulus measures, and the NPC meeting was expected to provide more information on the financial front.

Data released earlier this week showed Chinese imports fell 2.3% year on year in October, more than expected for a 1.5% fall and a reversal from a 0.3% increase the previous year. month.

JPMorgan analysts said in a recent note that Trump’s victory could lead Beijing to roll out even more fiscal stimulus, given that Trump has promised to impose high trade tariffs on the country.

Markets digest Trump’s victory

Oil prices initially fell on Wednesday following Trump’s victory in the 2024 presidential election. That initial weakness was fueled by fears that U.S. oil production would increase further under Trump, leading to a wider global supply glut.

But prices capped some losses amid bets that Trump will take a tough stance on Iran and Venezuela, likely imposing additional sanctions on the two countries and cutting off some global oil supplies.

Trump is also expected to pursue more expansionary policies, which bodes well for economic growth and could support US demand in the coming years.

“The impact of a Trump presidency is still uncertain, with multiple opposing forces potentially at play,” ING analysts said in a note.

“A stronger dollar is likely to create headwinds not only for oil, but also for the broader commodity complex, as we witnessed yesterday. Additionally, the Trump administration could see an increase in oil and gas leasing on federal lands, which has fallen significantly under Biden. However, on the other hand, Trump’s presidency also opens the door to a more aggressive US stance towards Iran, which could mean stricter enforcement of oil sanctions. just over 1 million barrels of oil per day are at risk.”

Hurricane Rafael and the Fed meeting in the spotlight

In addition to US policy, markets took negative cues from data showing stronger-than-expected US economic growth.

Traders are also keeping an eye on possible supply disruptions in the Gulf of Mexico due to Hurricane Rafael, which is expected to pass through the oil-rich region this week.

“According to the Bureau of Safety and Environmental Enforcement, oil production in the US Gulf of Mexico was stopped due to the storm at just over 304 thousand barrels per day,” ING said.

Decision A is also expected to conclude later on Thursday, with the central bank expected to cut interest rates by 25 basis points.

(Ambar Warrick contributed to this article.)