Decreasing Chinese crude imports send prices down
Oil prices slide Wednesday following news that Chinese oil imports declined for the second month in a row. In Japan, there was also a drop in orders for core machinery. On the other hand, last seek saw a build-up in US crude inventories, according to the American Petroleum Institute.
A barrel of European reference crude Brent costs USD 104.44 Wednesday morning against USD 104.72 Tuesday afternoon. US equivalent West Texas Intermediate trades concurrently at USD 100.52 against USD 101.99.
In March, Chinese crude imports dropped by 14 percent compared to the same month last year. This marks the second consecutive month of declining oil imports. Slowing demand for crude is caused by the nation’s lockdown measures imposed as a result of mounting Covid-19 cases. A lockdown is in effect in the second most populous city, Shanghai.
In total, China imported 42.71 million tonnes of crude in March, equal to 10.06 million barrels per day, according to figures compiled by Reuters.
On Tuesday, oil prices went up amid easing lockdown restrictions in China.
Meanwhile, Japan saw core machinery orders drop by 9.8 percent against market expectations of a 1.5-percent decline, according to Bloomberg News. This marks the steepest monthly fall in nearly two years, reports Reuters.
Despite the falling prices, the prices continue to be buttressed by diminishing oil and gas production from Russia as well as a warning from the Organization of Petroleum Exporting Countries that Russia’s falling output cannot be offset elsewhere by member nations and allies under OPEC+.
”Vladimir Putin’s statements that negotiations with Ukraine have reached a dead end, and comments by President Biden accusing Russia of genocide reinforce that the situation in Ukraine and Russia will not de-escalate anytime soon – another reason to expect that the downward trend for oil prices is limited,” says OANDA senior market analyst Jeffrey Halley to Reuters.
Last week, US crude inventories rose by 900,000 barrels, according to figures from American Petroleum Institute. Meanwhile, distillate and gasoline inventories.
Official figures from the US Energy Information Administration will be released later Wednesday.
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