The China National Petroleum Corporation (CNPC) Dalian Petrochemical Corp Refinery is seen near downtown Dalian, east China’s Liaoning province, 17 July 2018. Picture taken July 17, 2018. REUTERS/Chen Aizhu/File Photo Acquire License Rights
- China to halve stamp duty on stock trading to boost flagging market
- Tropical Storm Idalia is expected to hit Florida as a hurricane
- Fed Chair Powell says higher interest rates may be needed
LONDON, August 28 (Reuters) – Oil prices were little changed on Monday after China took measures to shore up its ailing economy, although investors remained concerned about the pace of growth and further US interest rate hikes that could dampen demand.
China has halved stamp duty on stock trading in its latest attempt to boost troubled markets. The market is also keeping an eye on Tropical Storm Idalia and any risk it poses to oil and gas production in the US Gulf.
Brent crude was down 7 cents, or 0.1%, at $84.41 a barrel by 1222 GMT, with an earlier rally fizzled just below $85. U.S. West Texas Intermediate crude was up 3 cents at $79.86.
The focus today is on “actions by China to support its economy, Tropical Storm Idalia en route to Florida and whether Brent can regain momentum if it breaks above $85,” said Ole Hansen, head of commodity strategy at the Saxo Bank.
According to the latest update, Idalia’s intensity increased as it approached Cuba. The most likely impact will be a day or two of power outages, said IG market analyst Tony Sycamore. This “should lead to some support for oil prices in the near term,” he said.
Brent and US crude posted a second week of losses on Friday after Fed Chair Jerome Powell said the Federal Reserve may need to raise interest rates further to cool still-too-high inflation.
Still, CMC market analyst Tina Teng said a soft-landing scenario for the US economy on Monday gave energy markets a boost, despite the Federal Reserve’s dovish stance on rate hikes.
Oil prices stayed above $80 a barrel, helped by falling oil inventories and supply cuts by the OPEC+ oil producer group.
Analysts told Reuters last week that Saudi Arabia is likely to extend a voluntary one million barrels-per-day oil production cut through October as the kingdom looks to continue supporting the market.
Additional reporting by Florence Tan and Sudarshan Varadhan; Adaptation by Jason Neely, Kirsten Donovan and Louise Heavens
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