Oil slumps on modest growth in China and investor unease over US Federal Reserve testimony later in the week. Targets for 2023 of a 5% growth comes after historically low Chinese growth of a mere 3% in 2022, mauled by harsh Covid restrictions, real estate downturns and dwindling export flows.

However, oil prices hardly changes against Friday’s closing time.

A barrel of European reference crude Brent trades for USD 85.02 on Monday morning, down from USD 85.15 on Friday afternoon. US West Texas Intermediate goes for US 78.89, against USD 78.88 on Friday.

On Sunday, Chinese growth projections were announced at 5%, down from last year’s gross domestic product growth target of an expected 5.5%. Reuters cites policy sources saying that targets ranging to 6% could be set for this year.

Chinese Premier said on Sunday that the foundation for stable growth in China needs consolidation. Insufficient demand poses problems, and the expectations of private investors and businesses are unstable.

”Crude remains in a tug-of-war between optimism over Chinese reopening and nervousness over a hawkish Fed hurting the US economy,” says Vandana Hari, founder of oil market analysis provider Vanda Insights to Reuters.

Both crude benchmarks settled at USD 1 higher on Friday after two sources, according to Reuters, reported that fears that the United Arab Emirates was considering leaving Opec was unfounded.

Hari estimates that the rebound was bigger than the slump of the fake rumors, which is why prices are correcting downwards on Monday,

Investors will keep a close eye on US Federal Reserve Chair Jerome Powell when he testifies to US Congress on Tuesday and Wednesday. Here he will likely be quizzed on interest hikes.

Over the weekend, European Central Bank President Christine Lagarde said it was very likely they would raise interest rates this month to curb inflation.