MercoPress. South Atlantic News Agency

Oil prices slump after China omits 2020 economic growth target

Brent crude fell US$1.56, or 4.3%, to US$34.50 a barrel, and West Texas Intermediate (WTI) crude dropped by US$1.79, or 5.3%, to US$32.13 a barrel.

Oil prices slumped on Friday after China's decision to omit an economic growth target for 2020 renewed concerns that the fallout from the coronavirus pandemic will continue to depress fuel demand in the world's second-largest oil user.

Brent crude fell US$1.56, or 4.3%, to US$34.50 a barrel by 0323 GMT, after gaining nearly 1per cent on Thursday. West Texas Intermediate (WTI) crude dropped by US$1.79, or 5.3%, to US$32.13 a barrel.

China's National People's Congress (NPC) kicked off a week-long meeting on Friday with the government saying it omitted the 2020 target, while pledging to issue 1 trillion yuan (US$140 billion) of special treasury bonds to support companies and regions hit by the pandemic.

Abandoning the growth target “could be interpreted as putting less focus on infrastructure investment and could be viewed as negative for oil,” said Stephen Innes, chief global market strategist at AxiCorp.

“The commodity market, in general, was looking for a bigger infrastructure pump from the NPC so there is bound to be an element of disappointment,” he said.

Still, both Brent and WTI are heading for a fourth week of gains as more evidence emerged that fuel demand is recovering as countries ease business and social restrictions imposed to counter the coronavirus pandemic.

Gasoline demand is returning with traffic congestion in some of the world's capitals recovering to year-earlier levels after the lifting of coronavirus.