US crude dips 5 cents, settling at $74.29, as Chinese stimulus measures shrink early losses
Published 9:14 PM ET Sun, 7 Oct 2018 | Updated 2:35 PM ET Mon, 8 Oct 2018 | ReutersPhoto: Andrew Burton | Getty Images
Oil prices fell on Monday but pared losses along with the U.S. stock market as investors bet that China's economic stimulus steps on Sunday would be sufficient to boost the world's No. 2 economy and bolster its crude demand.
Global benchmark Brent crude slid below $83 per barrel early in the session, partly on concerns the U.S.-China trade war could weaken crude demand in China.
But prices bounced off session lows as investors bet that Sunday's move by China's central bank to slash lenders' reserve requirements would spur economic growth, analysts said.
"Every time China cuts interest rates, they increase oil consumption," said Phil Flynn, an analyst at Price Futures Group in Chicago. "Cooler heads are prevailing."
Oil prices also pared losses after Irving Oil confirmed a "major incident" at Canada's largest refinery in Saint John, New Brunswick following reports of an explosion.
Brent crude hit a session low of $82.66 and then bounced back to trade 43 cents lower at $83.73 per barrel at 2:25 ET. Brent hit a four-year high of $86.74 last week.
U.S. crude ended Monday's session down 5 cents at $74.29, off its session low of $73.07.
Oil traders initially reacted to a selloff in Chinese stocks, but as the U.S. stock market opened higher, "we've pulled back dramatically," said Mark Anderle, an energy trader at TAC Energy.
Also pressuring oil below $83 a barrel in early trade were reports that some Iranian oil exports will keep flowing after the U.S. re-imposes sanctions. Two companies in India have ordered Iranian barrels in November, India's oil minister said on Monday.