(A Reuters file pic shows a pump jack operating at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015.)
SINGAPORE: Oil prices inched up after China said it would raise spending to stem an economic slowdown that has been weighing on financial markets.
International Brent crude oil futures were at US$61.85 per barrel at 0624 GMT, up 35 cents, or 0.6%, from their last close.
US West Texas Intermediate (WTI) crude futures were at US$53.26 per barrel, up 25 cents, or 0.5%.
The firmer prices followed a 2% fall in crude futures and a slump in international financial markets on Tuesday as concerns over global growth spooked investors into looking for safe-haven assets such as government bonds or gold.
A widespread economic slowdown is expected to dent growth in demand for fuel, weighing on energy prices.
Chinese finance ministry officials yesterday said the government would step up fiscal spending this year to support its economy, which last year registered its lowest growth rate since 1990.
The Bank of Japan said yesterday it would keep its ultra-easy monetary settings which have been running since 2013. That came after Japan reported that its December 2018 exports fell by 3.8%, the most in more than two years, dragged down as weak global demand and US-Sino trade frictions took their toll on the trade-reliant economy.
Meanwhile, Japan’s 2018 crude oil imports fell to 3 million barrels per day (bpd), the lowest since records started in 1979, the finance ministry said yesterday.
Steen Jakobsen, chief economist at Denmark’s Saxo Bank, said “the global economy is suffering”, but added that China’s government would “do all it can for stability”.
This included for the United States and China to find a solution to their bitter trade dispute, Jakobsen said, but to prevent a sharp economic slowdown, a solution needs to show itself before Feb 5, the Lunar New Year.
Should a deal be reached by then, “we will see powerful support for the Chinese economy”, he said, as well as the launch of strong stimulus programmes to keep the economy growing. — Reuters
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