Oil prices fall as market shrugs off China growth pledge, OPEC+ production cuts

An oil and gas industry worker walks during operations of a drilling rig at Zhetybay field in the Mangystau region, Kazakhstan, November 13, 2023. 
Turar Kazangapov | Reuters

Crude oil futures fell for a second consecutive day Tuesday as China’s pledge to boost economic growth and OPEC+ production cuts failed to lift prices.

The West Texas Intermediate contract for April dropped 72 cents, or 0.91%, to $78.02 a barrel. May Brent futures shed 57 cents, or 0.69%, to $82.83 a barrel.

The Beijing government on Tuesday set an economic growth target of about 5% for 2024 and announced the issuance of $138.9 billion in “ultra-long” special Treasury bonds to fund major projects.

OPEC and its allies, OPEC+, agreed on Sunday to extend crude production cuts of 2.2 million barrels per day through the second the second quarter.

Walter Chancellor, an energy strategist with Macquarie, told clients in a note Sunday that the extension of OPEC+ cuts, which was widely expected, had probably already been priced into the market.

Traders have worried for months that faltering economic growth in China and an abundance of crude produced in the Americas, above all the U.S., will put downward pressure on prices.