Oil dips on weak China imports
> But market remains well supported by weak US crude inventories and Iran sanctions
SINGAPORE: Oil prices dipped yesterday after China reported relatively weak import data, although the market remained well supported by falling US crude inventories and the introduction of sanctions against Iran.
Front-month Brent crude oil futures were at US$74.50 (RM303.60) per barrel at 0651 GMT, down 15 cents, or 0.2%, from their last close.
US West Texas Intermediate (WTI) crude futures were at US$69.15 per barrel, down 2 cents.
China’s crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country’s smaller independent, or “teapot”, refineries.
Shipments into the world’s biggest importer of crude came in at 36.02 million tonnes last month, or 8.48 million bpd, up from 8.18 million bpd a year ago, and just up on June’s 8.36 million bpd, data from the General Administration of Customs showed.
However, July imports were still the third-lowest so far this year.
Singapore-based brokerage Phillip Futures said yesterday that an escalating trade dispute between the United States and China has “unnerved investors on the prospect of lowered global oil demand growth”.
Markets were still supported by the introduction of new US sanctions against Iran on Tuesday, which initially target Iran’s purchases of US dollars – in which oil is traded – metals trading, coal, industrial software and its auto sector.
From November, Washington will also target Iran’s petroleum sector.
Iran is the third-largest producer among the members of the Organisation of the Petroleum Exporting Countries (Opec). It shipped out almost 3 million barrels per day (bpd) of crude in September, equivalent to around 3% of global demand.
Beyond the sanctions, the oil market was focusing on the US market, where the American Petroleum Institute said on Tuesday that crude inventories fell by 6 million barrels in the week to Aug 3 to 407.2 million.
Official US fuel storage data was due to be released later yesterday by the Energy Information Administration (EIA).
In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 US crude output to 10.69 million bpd, down from its previous estimate of 10.79 million bpd. – Reuters