Oil prices slipped majorly on Monday and erased nearly all gains made last week after official data revealed that China’s inflation rate plunged. The economy revealed an additional stimulus package to help revive the domestic industry, however, the authorities didn’t disclose any details about the size of the fiscal measures.


This also triggered concerns regarding the fuel demand in China, which is also the biggest crude importer in the world, reported Reuters. Brent crude futures slipped $1 to touch $78.04 per barrel by Monday afternoon, while the US West Texas Intermediate crude futures also declined $1 or 1.3 per cent to $74.56 per barrel.


Both the benchmarks erased their gains made last week, declining over 1.5 per cent a barrel before making some recovery. Notably, China’s deflationary pressures worsened in September, official data released on Saturday stated. 


Also Read : Durable Retailers Report Weak Sales During Dusshera, While E-Commerce Players See Robust Growth


This news from China led to more concerns in the market after the investors expressed worries regarding a possible response from Israel to Iran and its impact on oil production. In a note on Monday, Priyanka Sachdeva, analyst, Phillip Nova, explained, “Consumer prices index reading from China indicates a sustained deflationary trend and weaker domestic consumption despite the announcement of the most aggressive monetary stimulus by authorities in September.”


The consumer price index failed to meet market expectations and the producer price index slipped at the fastest pace seen in six months, falling 2.8 per cent on a year-on-year basis, the National Bureau of Statistics in China revealed.


Tony Sycamore, IG market analyst, referred to the briefing by the Chinese finance ministry on Saturday as ‘a flop’, the report said. The analyst noted, “The fiscal measures needed to remove downside risks to growth and ignite the animal spirits within Chinese consumers (are) conspicuous in their absence.”


Also Read : China’s Consumer Inflation Eases In Sep Even As Deflationary Pressures Build