Oil prices wallow near 5-mth low with China stimulus, US inventories in focus

Oil prices fell slightly in Asian trade on Wednesday as markets remained on edge over tariff-related headwinds and increasing global production, with focus turning to stimulus measures in top importer China.
On Tuesday, prices had fallen to a five-month low as investors worried about worsening demand and economic woes caused by increased U.S. trade tariffs. This came as U.S. President Donald Trump delivered on his threats of higher tariffs against China, Canada, and Mexico.
Oil markets were also rattled by reports that the Organization of Petroleum Exporting Countries and allies (OPEC+) will proceed with a plan to begin increasing production, albeit marginally, from April.
Despite this, China, the world’s largest oil importer, provided some relief for crude prices by announcing a slew of stimulus measures and a target for economic growth of 5% by 2025. Industry data also showed a bigger-than-expected draw in U.S. inventories.
Brent oil futures expiring in May fell 0.2% to $70.93 a barrel, while West Texas Intermediate crude futures fell 0.3% to $67.46 a barrel by 20:51 ET (01:51 GMT). Both contracts remained close to a five-month low hit earlier this week.
China targets 5% GDP, outlines stimulus plans
China set a gross domestic product target of 5% for 2025, keeping the figure unchanged for a third consecutive year.
The figure was revealed at the opening of the annual meeting of the National People’s Congress, China’s most important political meeting.
Beijing promised more measures to boost local consumption, which has been a major source of pressure on local growth, in addition to announcing a higher budget deficit for 2025, a sign of increased fiscal spending. Beijing will also ramp up its debt issuance in 2025 to allocate more resources towards consumer subsidies.
API reports a larger-than-expected decline in US inventories. The American Petroleum Institute’s data showed that oil stocks in the United States decreased by nearly 1.5 million barrels in the week ending February 28, exceeding expectations for a draw of 0.3 million barrels. The reading usually heralds a similar print from official inventory data, which is due later on Wednesday. U.S. inventories shrank last week after four straight weeks of outsized builds.
But signs of a draw in the past week raised some hopes that fuel demand was improving and U.S. supplies were tightening.
Oil prices were battered by Trump also calling on higher energy production, domestically and abroad.