(Bloomberg) -- Oil dropped as broader risk-off sentiment overshadowed news of China’s gradual rollout of stimulus measures to aid its economy. 

Global benchmark Brent settled below $76 with traders shying away from risk assets. Chinese banks reduced their benchmark lending rates on Tuesday but the country’s gradual rollout of broader measures for its ailing economy is fueling a debate among traders over how far authorities will go to aid growth. 

“This shortened week looks like it could be an ugly one for oil,” said Ed Moya, senior market analyst at Oanda Corporation. Risk aversion appears to be back in the market amid signs China’s recovery will struggle given the limited stimulus, he said.

The market for physical crude in Asia has firmed in recent days on a flurry of buying by a giant Chinese refiner, though the country’s biggest oil and gas producer cut its demand forecast for this year. 

Oil has struggled for direction in recent weeks. A flood of supply from Russia and Iran has kept the availability of crude elevated. Ample supply coupled with central bank hikes has generally pressured prices this year. To try to arrest the drop, the Organization of Petroleum Exporting Countries and its allies have scaled back production.

Read More: Russian Oil Flows Edge Lower But Evidence of Cuts Remains Scant

To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.

©2023 Bloomberg L.P.