Oil declined after China’s highly anticipated Finance Ministry briefing on Saturday lacked new incentives to boost consumption in the biggest importer, with the specter of Israeli strikes on Iran hanging over the market.
Brent fell almost 2 per cent early on Monday before recovering to trade near $US78 ($115.92.
West Texas Intermediate dropped below $US75 ($111.46).
Despite Beijing’s promises of more support for the struggling property sector and hinting at greater government borrowing, the briefing didn’t produce the headline dollar figure for fresh fiscal stimulus that the markets had sought.
Meanwhile, oil traders are continuing to monitor Israel’s response to Iran’s October 1 ballistic missile attack, with one report suggesting it has narrowed down potential targets to military and energy infrastructure.
Over the weekend, a Hezbollah drone attack killed four Israeli soldiers, while the Pentagon said it would send an advanced missile defense system and associated troops to help shield its ally.
“A bumpy recovery in Chinese demand overshadowed the concerns of further escalation in the Middle East, which could dampen the flow of oil barrels from the key producing nations,” Priyanka Sachdeva, a senior market analyst at brokerage Phillip Nova Pte in Singapore, said in a note.
“Oil prices are largely expected to be range bound.”
Brent has risen about 9 per cent this month as the prospect of an escalation in the Middle East conflict threatens output from a region that supplies about a third of the world’s oil.
The tensions have seen hedge funds flee bearish bets against the crude benchmark at the fastest pace in nearly eight years.
Bloomberg.