Oil Slumps amidst Slow Chinese Buying
The global prices of crude oil remain tight amidst slow Chinese buying as citizens began to revolt against the authority’s covid -19 policy. In the market, Brent crude futures were trading around $84 per barrel on Tuesday.
The price dipped from a session peak of almost $86, as investors weighed hopes that China would soon relax some of its covid restrictions. Analysts said there is also a sign that the Organisation of Petroleum Exporting Countries and allies (OPEC+) could keep its output levels unchanged at its next meeting.
WTI crude futures were trading above $78 per barrel on Tuesday, down from a session peak of almost $80 per barrel amidst demand concern – in both China and the United States.
Recently, China’s national health authority said it would bolster vaccination among its senior citizens and avoid severe restrictions. This has continued to fuel speculation that the world’s top crude consumer is bending to pressure for a swifter reopening while offering a better outlook for demand.
Keeping a lid on prices were reports that OPEC and its allies, including Russia, would not adjust their output quotes at their next meeting on December 4th, a move seen bearish for markets given the deteriorating outlook for global demand.
Last month, the cartel announced a 2 million barrel-a-day output reduction for November implementation among members. READ: Oil Slumps as Virus, Chinese Economy Stoke Demand Fear
West African crude
Asian tenders were awarded for cargoes of West African crude while differentials remained under pressure from slow Chinese buying. Taiwan’s CPC purchased a cargo of Angolan Saxi from ExxonMobil, though price details did not immediately emerge.
Also, India’s IOC awarded its latest tender partially to Chevron for a cargo of Nigerian Escravos crude. Around three or four cargoes of Angolan crude loading in December had yet to be sold, a slow pace this late into the trading cycle as buying from top buyer China stayed muted.
Record high freight rates continued to dampen buying, with traders expecting offers to continue to slip. Angola finalized its January export loading schedule at 39 cargoes, a relatively high volume after several programmes earlier in the year that stood at well below decade lows. # Oil Slumps amidst Slow Chinese Buying