Oil prices fall as China’s demand data disappoints

LONDON (Reuters) – Oil prices fell 2 percent on Monday after Chinese data showed that demand from the world’s largest importer of crude remained weak in September as tough coronavirus policies and fuel export restrictions cut consumption.

Brent crude futures for December settlement fell $1.67, or 1.8 percent, to $91.83 a barrel by 0855 GMT, after rising 2 percent last week. US West Texas Intermediate crude for December delivery was $83.27 a barrel, down $1.78, or 2.1%.

Customs data showed that China’s crude oil imports for September, at 9.79 million barrels per day, despite rising in August, were down 2% from a year earlier, as independent refineries limited production amid weak profit margins and a decline in demand.

Register now to get free unlimited access to Reuters.com

“The latest recovery in oil imports faltered in September,” ANZ analysts said in a note, adding that independent refineries failed to capitalize on increased quotas as the ongoing COVID-related shutdown affected demand.

“This is exacerbated by lower refinery margins and product export restrictions,” analysts said.

Saudi Arabia and Russia were in mixed rank with China’s top suppliers in September.

ING analysts said in a note that uncertainty about the non-spreading policy of the Corona virus and the real estate crisis in China are undermining the effectiveness of pro-growth measures, even though third-quarter GDP growth exceeded expectations.

Brent crude rose last week despite US President Joe Biden’s announcement to sell the remaining 15 million barrels of oil from the US Strategic Petroleum Reserves. The sale is part of a record launch of 180 million barrels that began in May.

See also  coli outbreak associated with Wendy's restaurants has infected 97 people in 6 states

Biden added that his goal would be to replenish stocks when US crude reached about $70 a barrel.

Energy services company Baker Hughes said in a report that US energy companies added oil and natural gas rigs last week for the second week in a row as relatively high oil prices encourage companies to drill more.

Register now to get free unlimited access to Reuters.com

Additional reporting by Florence Tan. Editing by Christian Schmolinger, Jimmy Freed and Mike Harrison

Our criteria: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.