Oil Prices Decline as Data from China Indicates Weak Demand

Oil Prices Decline as Data from China Indicates Weak Demand

Oil prices slipped on Tuesday over demand concerns, as data from China showed a 15% year-on-year drop in crude imports in the country in the past months and Indian pandemic-induced constrained demand.

International benchmark Brent crude was trading at $71.02 per barrel after a 0.65% drop from closing price of $71.49 a barrel on Monday.

Also, the American benchmark West Texas Intermediate (WTI) was trading at $68.80 a barrel at the same time with a 0.62% decrease after ending the previous session at $69.23 per barrel.

While OPEC’s demand predictions underpinned crude prices in recent weeks, Chinese data released on Monday showed crude oil imports fell by 15% in May due to refinery maintenance downtime.

A stronger and sooner demand rebound from the disciplined production policy of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, is predicted with forecasts in OPEC’s latest oil market reports that oil demand will surge by 6% in 2021, particularly in the second half of the year.

Despite positive estimates on short-term demand recovery, investors are concerned about oil demand in countries that are still battling coronavirus.

The worldwide case count is now close to 174 million, including a death toll of more than 3.7 million, according to a running tally from the Johns Hopkins University in the US.

While the number of cases has almost reached 34 million in the US, India follows with nearly 29 million and Brazil with 17 million.

The vaccination rates in some southern US states are lagging, which according to some experts, could cause a surge in coronavirus cases in these areas over the summer.

Oil Prices Decline as Data from China Indicates Weak Demand