NEW YORK, Aug. 25 (UPI) — A Chinese decision to cut a key interest rate, and signs of marginal growth, gave oil prices a lift in Tuesday trading, a day after steep global declines.
Brent crude oil prices moved up 3.3 percent in early trading Tuesday to $44.08 per barrel. West Texas Intermediate, the U.S. index for crude oil prices, moved in parallel to $39.55. Both indices dropped more than 4 percent at the opening bell Monday following a deep crash on the Shanghai Composite Index.
A series of steep declines in the Shanghai were met by reactive efforts by the Chinese government to slow the fall. The People’s Bank of China said Tuesday it was cutting its interest rate for financial institutions and its benchmark rate in its latest effort to stave off further declines.
The Shanghai Composite Index closed down more than 7 percent prior to the interest rate decision. In a sign of potential stability, however, Boeing, the largest provider of commercial airplanes to China, said it expected strong demand, with China’s fleet nearly tripling during the next 20 years.
“Despite the current volatility in China’s financial market, we see strong growth in the country’s aviation sector over the long term,” Randy Tinseth, vice president of marketing, said in a statement.
Mining giant BHP Billiton, after indicating a dramatic drop in revenue through June, said it expected weak market conditions, notably in China, to last. The company said oil demand growth was expected to be lower than supplies, putting more downward pressure on oil prices through the year.
Japan’s downward trajectory added to concerns about the health of developed Asia. In April, Saudi Oil Minister Ali al-Naimi said he expected Asian oil demand would “remain strong,” lending support to a decision to maintain strong oil production.