Crude Oil Market Edges Lower on Chinese Demand, Stronger Dollar
By Adedapo Adesanya
The crude oil market depreciated on Monday as data showed that demand from China remained lacklustre in September, with the US Dollar growing stronger, putting pressure on the commodity.
At the market yesterday, the Brent crude futures lost 24 cents or 0.3 per cent to settle at $93.26 a barrel as the US West Texas Intermediate (WTI) crude futures fell by 47 cents or 0.6 per cent to $84.58 a barrel.
The market reacted as data showed that China’s September crude imports of 9.79 million barrels per day were 2 per cent below a year earlier levels.
The world’s largest crude importer brought in 40.24 million tonnes of crude oil last month, equivalent to about 9.79 million barrels per day. While that was up from 9.5 million barrels per day in August, shipments remained below the nearly 10 million barrels per day imported a year earlier.
Imports for the first three quarters of the year totalled 370.4 million tonnes, or about 9.9 million barrels per day, 4.3 per cent below the corresponding period last year. This marks the first annual decline for this period since at least 2014.
China’s fuel demand took a hard hit as the country’s drastic COVID-19 curbs stifled travel and manufacturing activities.
Prices were also down due to the ongoing strength in the US Dollar, which was up again for part of the trading session following another suspected foreign exchange intervention by Japan. A stronger Dollar makes oil more expensive for non-US buyers.
Oil prices, however, gained some ground after data that showed US business activity contracted for a fourth straight month in October, with manufacturers and services firms in a monthly survey of purchasing managers both reporting weaker client demand.
Brent rose last week despite USPresident Joe Biden announcing the sale of a remaining 15 million barrels of oil from the Strategic Petroleum Reserves, part of a record 180 million-barrel release that began in May.
Mr Biden added that his aim would be to replenish stocks when US crude is around $70 a barrel.
However, Goldman Sachs said the release of the commodity was unlikely to have a large impact on prices.