Oil prices fell amid new concerns about demand after data showed China’s crude imports fell in the first half of the year. But it is holding on at a one-week high as the world signals relief from the coronavirus pandemic and OPEC+ supply concerns preoccupy the minds.
Brent crude was down 8 cents, or 0.1%, to $76.41 a barrel as of 0602 GMT, after gaining 1.8% on Tuesday. West Texas Intermediate (WTI), which was up 1.6% in the previous session, was up 15 cents, or 0.2%, to $75.10 a barrel.
Crude oil imports fell 3% for the first time since 2013 in the January-June period as China restricted import quotas, refinery maintenance expenditures and decrease buying at rising global prices. Imports also fell, as rising crude oil prices reduced the refinery’s profit margins.
If OPEC does not agree to increase supply, higher oil prices will likely cause serious demand chaos in more cost-sensitive emerging markets, especially in India.
The disputes over the supply policy of the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers known as OPEC+ led to the end of production increase talks last week before they were concluded. Oil, then, is unlikely to bounce back from its July highs until some clarity emerges on resolving the production impasse.
When we look at the stocks from the USA, Europe and Japan, we can say that the oil products withdrawn from storage globally in the third quarter were at least the highest level in the last ten years.
U.S. oil and gasoline inventories fell last week, according to two market sources on Tuesday, citing figures from the American Petroleum Institute.
Crude inventories fell by 4.1 million barrels for the week of July 9, marking the eighth consecutive week’s decline, sources said.
