Oil prices slipped for a second day as concern over China's plan for growth and uncertainty over the pace of US interest rate cuts offset the prospect of a tighter market due to continued OPEC+ supply restraint.
China set an economic growth target for 2024 of around 5%, similar to last year's goal and in line with analysts' expectations, but the lack of big ticket stimulus plans to prop up its struggling economy disappointed investors.
Brent crude fell 42 cents, or 0.5%, to $82.38 a barrel this afternoon while US West Texas Intermediate (WTI) was down 39 cents, or 0.5%, to $78.35.
Brent has gained about 7% this year.
"Public enemy No 1 of a protracted rally and the $90 oil price is the uncertainty surrounding interest rate cuts," said Tamas Varga of oil broker PVM, who added that concern over China's growth target was adding downward pressure.
The US Federal Reserve is under no urgent pressure to cut interest rates given a "prospering" economy and job market, Atlanta Fed President Raphael Bostic was reported as saying yesterday.
Some support came from the prospect of a tighter market after members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday extended their voluntary oil output cuts of 2.2 million barrels per day (bpd) into the second quarter.
"The market has been moving higher in recent weeks amid improving fundamentals. Rising spot prices indicate the physical market has begun to tighten amid a host of other supply-side disruptions," analysts at ANZ said in a note.
Even so, the latest round of US inventory reports are expected to show crude stocks increased about 2.6 million barrels last week, while distillates and gasoline stockpiles are forecast to decline.
