By Adedapo Adesanya
The positive data on Chinese crude imports helped to boost the prices of the commodity at the international oil market on Tuesday, October 13.
During the trading day, the price of the Brent crude went up by 68 cents or 1.63 per cent to $42.40 per barrel while the value of the United States’ benchmark, West Texas Intermediate (WTI) crude, went up by 77 cents or 1.95 per cent to close at $40.60 per barrel.
China’s crude oil imports rose 2.1 per cent in September from the previous month as some delayed cargoes finally cleared customs after months-long port congestion eased, while onshore storage capacity was expanded.
The world’s top crude oil importer took in 48.48 million tonnes of oil last month, equivalent to 11.8 million barrels per day, according to data from the General Administration of Customs on Tuesday.
In August 2020, a total of 11.18 million barrels per day was imported by the Asian giant and September 2019, the volume was 10.04 million barrels per day. The volume of oil imported by the country last month, according to the data, was still lower than the record high level of 12.94 million barrels a day recorded in June 2020.
The import data from China was the only driver for prices on Tuesday as market analysts believe that a lot of bearish factors will make it difficult to sustain present levels.
Leading this is Libyan crude production which has come back online in its largest oil field, Sahara. This could double the country’s crude production to 650,000 barrels a day within a few weeks.
Also, the return of production after the end of a Norwegian oil strike and the return of production in the Gulf of Mexico would further depress prices.
In addition, the uncertain state of global the economy as a result of renewed restrictions caused by the second wave of coronavirus pandemic may become more severe and this isn’t a good outlook for the market.
Demand is also showing no signs of improvement as the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday left its outlook for 2020 oil demand relatively unchanged, noting a decline of 9.5 million barrels a day, year on year, to reach 90.3 million barrels a day.
For 2021, however, OPEC revised demand lower by 80,000 barrels a day, forecasting growth of 6.5 million barrels a day to reach 96.8 million barrels per day.
This cut largely reflects a lower growth outlook for both developed and emerging market regions compared to the September forecast.
In another forecast, the annual World Energy Outlook report from the International Energy Agency (IEA) released Tuesday said global energy demand is expected to rebound to its pre-crisis level in early 2023, under a scenario in which COVID-19 is brought under control in 2021 and the global economy returns to pre-crisis levels that year.
Weekly data on US crude inventories will be released by the Energy Information Administration (EIA) on Thursday, a day later than usual, because of a federal holiday on Monday in the US. There are expectations of a decline of more than 2 million barrels to the week ended October 9.
Modupe Gbadeyanka