Oil prices slipped on Monday after China set a lower-than-expected target for economic growth this year at around 5 per cent, and as investors cautiously awaited U.S. Federal Reserve Chair Jerome Powell’s testimony this week.
“Crude remains in a tug-of-war between optimism over Chinese reopening and nervousness over a hawkish Fed hurting the U.S. economy,” said Vandana Hari, founder of oil market analysis provider Vanda Insights. Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated, insufficient demand remained a pronounced problem, and the expectations of private investors and businesses were unstable.
At the same time, oil prices are likely to be impacted by rate hikes across the world as global central banks tighten policy over fears of increasing inflation.U.S. Federal Reserve Chair Jerome Powell will testify to Congress on Tuesday and Wednesday, where he will likely be quizzed on whether larger hikes are needed in the world’s largest oil consuming country.