Oil prices continue to fall on the negative signals from China
In the course of trading on Friday the price of oil reference marks continues to fall noticeably after China for the first time since 1994, refused to set a target for annual GDP growth because of the effects of the epidemic of the coronavirus.
In addition, the traders ‘ focus next aggravation of relations between Washington and Beijing after the announcement of China’s intention to consider the national security bill in Hong Kong.
The cost of July futures for Brent crude on the London ICE Futures exchange to 14:24 MSK amounted to $34,35 per barrel, or $1,71 (4,74%) below the price of closing of previous session.
Futures for WTI crude oil for July in electronic trading on the new York Mercantile exchange (NYMEX) by this time fell by $1.91 a (5,63%) to $32,01 per barrel.
China’s decision not to set a target of increasing GDP for the current year, which the Premier of the state Council of China Li Keqiang said on the opening Friday of the annual session of vsekitajsky meeting of national representatives (vsnp), due to the fact that “the country is faced with factors which are difficult to predict”, including in the aftermath of the coronavirus, as well as uncertainty in trade. This decision is a negative factor for the world, given that China has long been the main engine of global growth, experts say.
Meanwhile, American senators have prepared a bill providing for sanctions against Chinese officials and organizations that monitor compliance with laws on national security in Hong Kong, and introducing penalties for banks that conduct business with these organizations.
A new national security bill to Hong Kong, which was included in the agenda of the NPC session, provides for a ban on separatist activities and terrorism and external interference.
In addition, the mood of traders is affected by the uncertainty over lifting of quarantine measures in the world against the background of misgiving to second wave of coronavirus, says S&P Global Platts.
“Oil prices will continue sensitive to any signs that the weakening of quarantine measures may lead to the second wave COVID-19 and thus exert a prolonged impact on demand,” the analyst notes AxiCorp Stephen Innes.
Meanwhile, the production of oil with condensate in Russia continued to decline in may, according to statistics seen by “Interfax”. Average daily production in that month was almost 17% lower than the same level of April and totaled 1284,1 thousand tons of oil and condensate. Overall, on 21 may, the production level was the lowest since the beginning of may – 1275,9 thousand tons.