Oil prices open lower on modest Chinese growth forecast

Oil prices opened lower on Monday after China set a modest target for economic growth this year of around 5%, lower than market expectations of 5.5% growth. The move signals Beijing's resolve to tackle debt risks and contain financial risks, which could dent demand for crude. China is the world's

Oil prices open lower on modest Chinese growth forecast

Oil prices fell Monday morning after China set a modest goal for economic growth of around 5% this year, which is lower than market expectations of 5.5% growth. China is the second largest oil consumer in the world.

China's closely monitored growth outlook for last year was lower than the target of 5.5%, and it came in below expectations. Reuters was recently informed by policy sources that a range of 6% to 6% could be possible.

Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated, insufficient demand remained a pronounced problem, and the expectations of private investors and businesses were unstable.

At the same time, oil prices are likely to be impacted by rate hikes across the world as global central banks tighten policy over fears of increasing inflation. Traders have started factoring in rate hikes across the world, but are hoping for smaller increases than last year.

The United States Federal Reserve's Chair Jerome Powell will testify to Congress on Tuesday and Wednesday, where he will likely be quizzed on whether larger hikes are needed in the world's largest oil consuming country.

The United States' future rate hikes are also likely to depend on what the February payrolls report reveals on Friday, followed by the February inflation report due next week.

Over the weekend, European Central Bank President Christine Lagarde said it was "very likely" they would raise interest rates this month to keep a lid on inflation. Australia's central bank is expected to lift rates by 25 basis points on Tuesday.