Oil dips below $75 per barrel on weak global economic outlook

2023-03-10 16:13:22

On Friday, Nymex West Texas Intermediate (WTI) futures fell below $75 a barrel during the Asian session. Oil prices resumed their downward journey, as market participants' optimism over China's economic recovery after the lockdown was eased sharply.

China's consumer price index (CPI) and producer price index (PPI) released on Thursday made it clear that China failed to boost domestic demand as expected after the country lifted its coronavirus lockdown.

China's CPI fell by 0.5% in February, the market generally expected 0.2%, and the previous value was 0.8%. Prices of goods and services in China fell 1% year-on-year, below expectations of 1.9% and the previous value of 2.1%.

In addition, the PPI annual rate fell by 1.4%, which is expected to fall by 1.3%, and the previous value fell by 0.8%. This suggested that producers lowered prices for goods and services to offset weaker demand. Domestic demand is still sluggish, and consumers still have worries about the future and are unwilling to let go of consumption.

The economic outlook for the world giant, the United States, also looked gloomy after feeling a weaker outlook for the world's second-largest economy. The Federal Reserve is widely expected to hike interest rates more aggressively as U.S. inflation is expected to pick up amid an improving labor market.

The number of Americans filing new claims for jobless benefits rose by the most in five months last week, but the underlying trend remained consistent with a tight labor market. Initial claims for state unemployment benefits rose 21,000 to a seasonally adjusted 211,000 for the week ended March 4, the largest increase since October and the most claims in two months, the Labor Department reported . Still, claims are well below the recession-related levels of 300,000. Continuing claims, a measure of hiring, rose 69,000 to 1.718 million in the week ended Feb. 25, suggesting some laid-off workers may find new jobs easily.

Looking ahead, the release of US non-farm payrolls (NFP) data will provide more clarity.

Despite signs of weakening in the global economic outlook, oil prices did not fall sharply as the US dollar index gradually fell to 105.25. If the U.S. non-farm payrolls are better than expected, investors may put a lot of money into the U.S. dollar index.

JRFX shares news information and professional technical analysis on foreign exchange, gold and crude oil every trading day. Follow us so as not to miss the market focus of the day and grasp the trading market in time.

JRFX reminds you: the market is risky, and investment needs to be cautious. This article does not constitute personal investment advice. Please choose corresponding investment products according to your own financial and risk tolerance, and do a good job in corresponding risk control.

About JRFX

· 12 years of financial market experience, the choice of more than 4 million customers, one of the most respected foreign exchange brokers in the world

· Provide 50+ trading products, including foreign exchange, gold, crude oil, stocks, indices, cryptocurrencies, etc.

· Three trading accounts to meet the investment needs of different customers

· Zero commission, low spread, leverage up to 1:1000

· You can open an account with a minimum deposit of 100 US dollars only

· 24-hour customer service

Online Service Create Account MyJRFX Download
Online Service