Drivers may benefit from China's slowdown
China's economic troubles could lead to lower oil prices and subsequently lower gasoline prices, providing relief for consumers and potentially impacting global energy markets.
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Posted 8/22/2023, 8:19:50 PM
yahoo.com
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Oil prices rose in Asian trade, despite a disappointing interest rate cut from China, due to the prospect of tighter supplies supporting the outlook.
China's slowing economy and worsening macroeconomic indicators may be good news for oil prices, as it could lead to changes in monetary policies and stimulate global demand for oil. Investing in oil ETFs, particularly the Energy Select SPDR Fund (XLE), which includes stable and profitable companies, may be a reliable option. There are risks involved, but with tight oil supply and central banks' desire to avoid an economic downturn, oil assets could still be favorable.
Oil prices dipped due to the possibility of Iraqi exports resuming and concerns over China's weakening economy impacting demand.
Crude oil prices continue to decline due to concerns about demand in China and the United States, despite positive news of production cuts and high global oil demand; technical charts indicate the possibility of further short-term losses.
China's economic challenges, including deflationary pressures and a slowdown in various sectors such as real estate, are likely to have a global impact and may continue to depress inflation in both China and other markets, with discounting expected to increase in the coming quarters.
China's economic slump, including a real estate crisis and high youth unemployment, coupled with rising tensions with the West, could lead to deflation and sluggish growth that could spread to the rest of the world, impacting global GDP growth and potentially causing a new normal of slower economic growth.
Oil prices increase as China takes steps to support its economy, but concerns about global growth, US interest rate hikes, and Chinese manufacturing data persist.
Oil prices slightly decrease as concerns over China's economic growth and potential U.S. interest rate hikes weigh on fuel demand.
China's economy is facing multiple challenges, including tech and economic sanctions from the US, structural problems, and a decline in exports, hindering its goal of becoming a top global exporter and tech power, which could have long-lasting effects on its status in international relations and the global economy.
Oil prices inched up on Monday as China implemented measures to support its struggling economy, although concerns about economic growth and potential US interest rate hikes continue to weigh on investor sentiment. The move by China to halve stamp duty on stock trading and the soft-landing scenario for the US economy helped boost oil prices, while the possibility of a hurricane hitting Florida could lead to short-term support for the oil price. However, the anticipation of easing sanctions on Iran and Venezuela has weakened the narrative of tightening supply.
China's economy is struggling due to an imbalance between investments and consumption, resulting in increased debt and limited household spending, and without a shift towards consumption and increased policy measures, the economic slowdown may have profound consequences for China and the world.
Oil prices eased as China's manufacturing activity contracted for the fifth consecutive month, raising concerns about the weak expansion in the world's second-largest economy, while investors await the release of the US personal consumption expenditure report.
If China were to slip into a deflationary spiral like Japan in the 1990s, it could lead to a decrease in consumer spending, a weakened economy, and negative consequences for the rest of the world, including a slowdown in imports for the US and adverse effects on developing economies reliant on Chinese exports and investment.
Falling prices in China, driven by a weakened economy, could benefit countries with elevated inflation such as the U.S., India, Germany, and the Netherlands.
Oil prices dipped as concerns over China's slow post-pandemic recovery and weak global economic data outweighed expectations of supply cuts by OPEC+ producers.
The prospect of a prolonged economic slump in China poses a serious threat to global growth, potentially changing fundamental aspects of the global economy, affecting debt markets and supply chains, and impacting emerging markets and the United States.
Oil prices ease in Asia as concerns over slow demand from China outweigh fears of tighter supply due to output cuts by Saudi Arabia and Russia.
The outlook for oil prices and Chinese demand, OPEC+ supply curbs, rising flows of Iranian crude, and the transition away from fossil fuels are among the key topics discussed at Asia's largest gathering of industry traders and executives.
The rebounding crude oil prices and fading annual base effects suggest that energy prices may become a headwind for global markets, potentially complicating the battle against inflation and tightening monetary policies.
China's economic growth has slowed but has not collapsed, and while there are concerns about financial risks and a potential property crisis, there are also bright spots such as the growth of the new energy and technology sectors that could boost the economy.
The tightening of oil supply and the alliance between Saudi Arabia and Russia to push for higher prices raises concerns for consumers as fuel costs surge, potentially impacting the global economy and inflation rates.
Rising oil prices are making it harder for the Federal Reserve to achieve its 2% inflation target, as increased energy costs could lead to higher prices for goods and services, potentially complicating the Fed's plan to hold interest rates steady and achieve a "soft landing" for the economy.
The Biden administration may artificially depress inflation by using taxpayer money to manipulate the global oil market and replenish the Strategic Petroleum Reserve, in an attempt to lower gas prices and improve the president's chances of re-election.
Oil prices fell due to a stronger US dollar and concerns about Chinese economic growth, but were supported by extended supply cuts by Saudi Arabia and Russia.
China's macroeconomic challenges, including deflationary pressures, yuan depreciation, and a struggling property sector, could have broader implications beyond its borders, impacting global metal exporters, trade deals, and global inflation; however, investing in China's stocks may offer compelling valuations despite the current downturn.
China's struggling economy, including its deflation and property crisis, will have a significant impact on the US due to its high foreign investment exposure in China and the dependence of key exporting countries like Chile, Australia, and Peru on the Chinese market.
Signs of improvement in China's economy, such as improving credit demand and easing deflationary pressures, may not be enough to stabilize the economy due to bigger concerns of decreasing affordability, tight wages, and rising costs that have not been addressed. A comprehensive policy revamp may be necessary for China's economy to recover.
Gasoline prices are rising due to oil supply cuts in Saudi Arabia and Russia, as well as flooding in Libya, but some experts believe that increasing oil prices will not have a significant impact on the US economy and do not expect them to rise much higher in the next year or two due to factors such as increased US oil production, slow global economic growth, and the green energy transition. However, high oil prices can lead to higher inflation, potential recession, and could influence the Federal Reserve to raise interest rates, but the impact may not be as severe as in the past, and some experts recommend investing in the energy transition and adopting a more defensive investment strategy.
Rising crude oil prices, driven by supply concerns and output cuts, threaten to push up petrol prices and hinder efforts to tame inflation, putting pressure on central bankers.
The increased exports of oil from the United States into Europe and Asia have allowed U.S. crude to regain its dominance in setting international oil prices, reducing volatility and potential market distortion, while also shifting power to U.S. companies and traders in the market.
Crude oil prices rose as inventories declined and demand from Asia and Europe decreased, threatening higher gas prices in the US and potentially impacting the Federal Reserve's interest rate decisions.