Oil dips on China outlook

Oil prices fell on Monday after China set a lower-than-expected target for economic growth this year at about 5% and as investors awaited US Federal Reserve Chair Jerome Powell's testimony this week.

Brent crude futures were trading down 60 cents, or 0.7% at $85.23 a barrel by 1520 GMT. US West Texas Intermediate crude futures were down 47 cents, or 0.6%, at $79.21.

"Crude remains in a tug-of-war between optimism over Chinese reopening and nervousness over a hawkish Fed hurting the US economy," said Vandana Hari, Founder of Vanda Insights.

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China’s closely watched growth outlook, announced on Sunday, was lower than last year’s 5.5% target for GDP growth. GDP grew last year by only 3%.

Policy sources had told Reuters the target could be set as high as 6% for 2023.

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

Future US rate hikes are also likely to depend on what the February payrolls report reveals on Friday, followed by the February inflation report next week.