Crude oil prices plunged on Friday after China (the second-largest economy in the world) decided to omit an economic growth target for 2020 amid concerns that the COVID-19 pandemic will continue to weaken economic growth
Brent crude lost 5.50%, to trade at $34.05 a barrel by 6 am Nigerian local time after gaining nearly 1% on Thursday.
China’s Political party started a week-long meeting on Friday today, saying that it skipped the 2020 target while pledging to issue $140 billion of special treasury bonds to support its citizen’s businesses and regions affected by the pandemic.
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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 in a note to Reuters.
“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,” Stephen Innes added.
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However, Brent is heading for the fourth week of gains as evidence shows that energy demand is picking up.
Traffic flows in Germany and Japan have improved, while in America many of its states have shown a growing demand for gasoline, as government eases restrictions.