An aerial view shows a tanker at an oil terminal off Waidiao Island in Zhoushan, Zhejiang province, China, January 4, 2023. China Daily via REUTERS/File Photo
TOKYO – Oil prices fell in early trading on Wednesday as concerns about weak demand from top crude importer China rose after bearish trade data, outweighing fears of tighter global supply due to to production cuts in Saudi Arabia and Russia.
Brent crude futures were down 17 cents, or 0.2 percent, at $86.00 a barrel at 0039 GMT. US West Texas Intermediate (WTI) crude was trading at $82.73 a barrel, down 19 cents, or 0.2 percent.
Both contracts gained almost $1 the day before.
“Oil prices are struggling to rise further amid lingering concerns about a slow recovery in the Chinese economy and fuel demand,” said Chiyoki Chen, chief analyst at Sunward Trading.
“In addition, with concerns about slowing demand in the US and Europe due to a series of interest rate hikes, the upside potential of the oil markets appears to be limited,” he added, predicting that WTI would trade at the range of $75 to $85 per barrel later. this month.
Both benchmarks posted their sixth consecutive weekly gains last week, the longest winning streak from December 2021 to January 2022, helped by a reduction in OPEC+ supplies and hopes that stimulus will spur a recovery in oil prices. oil demand in China.
But China’s crude oil imports in July fell 18.8 percent from a month earlier to the lowest daily rate since January, customs data showed Tuesday, as major exporters cut overseas shipments and stocks. Nationals continued to rise.
Overall, China’s imports contracted 12.4 percent in July, much more than the expected drop of 5 percent. Exports fell 14.5 percent, compared with a 12.5 percent drop forecast by economists.
Meanwhile, a monthly report from the US Energy Information Administration (EIA) on Tuesday projected US crude oil production to increase by 850,000 barrels per day (bpd). to a record 12.76 million bpd in 2023, surpassing the last peak of 12.3 million bpd in 2019. .
Crude prices have been rising since June, mainly due to Saudi Arabia’s prolonged production cuts, as well as rising global demand, the EIA said.
The world’s top exporter, Saudi Arabia, last week extended its voluntary production cut of 1 million bpd until the end of September, adding that it could be extended beyond that date or deepened. Russia also said it would cut oil exports by 300,000 bpd in September.
US crude oil inventories rose last week while gasoline and distillate stocks fell, according to market sources citing figures from the American Petroleum Institute on Tuesday.
US government data on reserves will be released later on Wednesday.
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