Oil prices fall as falling Chinese crude imports sound demand alarm

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TOKYO, July 14 (Reuters) – Oil prices fell on Wednesday amid concerns over future demand after data showed China’s first-half crude imports fell, but still remained near a week-long high due to concerns over supplies as the world recovers from the coronavirus pandemic.

Brent crude was down 8 cents, or 0.1%, to $ 76.41 a barrel at 1:41 a.m. GMT, after gaining 1.8% on Tuesday. West Texas Intermediate lost 13 cents, or 0.2%, to $ 75.12 a barrel, after jumping 1.6% in the previous session.

China’s crude imports fell 3% from January to June from a year earlier, the first such contraction since 2013, as import quota shortages, refinery maintenance and rising world prices held back purchases. Read more

“Imports have been reduced as soaring crude oil prices have eroded refinery profit margins,” Eurasia Group said in a note.

“If OPEC does not agree to increase supply soon, high oil prices will also likely lead to destruction of demand in even more cost-sensitive emerging markets, especially India,” Eurasia said.

The disagreement over supply policy within the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, known as OPEC +, led to the end of talks last week on relaunching production without an agreement.

The International Energy Agency said global third-quarter storage withdrawals are expected to be the largest in at least a decade, indicating inventory drawdowns in early June in the United States, Europe and Japan. Read more

US oil and gasoline inventories fell last week, two market sources said on Tuesday, citing figures from the American Petroleum Institute.

Crude inventories fell 4.1 million barrels for the week ending July 9, the sources said, in their eighth consecutive weekly decline.

Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell

Our standards: Thomson Reuters Trust Principles.

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