Oil Prices Trend Below $75 over Lingering Demand Risk
Crude oil prices are trading below $75 amidst lingering demand risk. The market witnessed a moderate rebound Thursday in oil prices, but the surge is not sufficient to upturn the large daily loss recorded on Wednesday.
The global price of crude oil has come under pressure amidst conflicts in the Middle East and sluggish demand in the US, and China. Weak Chinese oil import data has added fresh concerns for the oil market.
The EIA report also failed to provide support as a significant rise in the refined product inventories clouded the expectations for a seasonal demand pickup. ICE Brent settled down by around 4% yesterday to below US$75 per barrel.
Market data showed that Brent has dropped by nearly 10% since the OPEC+ meeting. Weaker demand data from China has further weighed on the sentiment in the short term.
The latest trade data from China shows that crude oil imports in the country dropped 9.2% year on year (first annual decline since April) to 42.4mt in November on slowing demand from refineries, weak economic indicators, and higher inventories, ING said in a Thursday note.
China imported around 49mt of crude oil in October 2023, showing a big fall in demand for the fuel.
Cumulatively, China’s crude imports have increased by 12% year on year to 515.6mt for the first eleven months of the year, although most of it could be attributed to high imports in the 2nd and 3rd quarters of the year, ING commodities strategists added.
ICE Brent price rose by 0.48% to $74.66 per barrel from the closing price of $74.30 a barrel in the previous trading session on Wednesday. The American benchmark, West Texas Intermediate (WTI), traded at the same time at $69.69 per barrel, up 0.44% from Wednesday’s close of $69.38 per barrel.
According to data from the US Energy Information Administration (EIA) on Wednesday, US gasoline stocks rose from approximately 5.4 million barrels to 223.6 million.
The administration in the same report also disclosed a decline in the country’s crude oil inventories, but the quantity was not enough to revive prices. Nigeria Eurobond Slumps after CBN Resumes OMO Auction