Oil Price Fundamental Daily Forecast – Weak Despite Calls for Seventh Consecutive Weekly Inventory DeclinePrices are being pressured by data that showed a drop in China’s half-year crude imports.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower shortly before the New York opening and the release of the U.S. Energy Information Administration weekly inventories report at 14:30 GMT.
Prices are being pressured by data that showed a drop in China’s half-year crude imports while expectations for a further tightening of U.S. inventories offered support.
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At 10:32 GMT, September WTI crude oil futures are trading $74.23, down $0.46 or -0.62% and September Brent crude oil futures are at $75.98, down $0.51 or -0.67%.
China January-June Crude Imports See First H1 Fall Since 2013
China’s crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying.
Imports totaled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).
That compared with 9.65 million bpd in May and a record 12.9 million bpd in June 2020, when refiners snapped up cheap oil to supply China’s quick recovery from the pandemic.
For the first half of 2021, imports into the world’s top crude oil importer totaled 260.66 million tonnes, or about 10.51 million bpd, 3% lower than a year earlier.
As the impact of COVID-19 locked down most of the world, China was the only major oil consumer to increase imports in 2020, accounting for a record 19.8% share of global imports for the year, the BP Statistical Review of World Energy showed.
American Petroleum Institute Weekly Inventories Report
The API on Tuesday reported a draw in crude oil inventories of 4.079 million barrels for the week-ending July 9, bringing the total 2021 crude draw so far to 50.01 million barrels, using API data. Analysts had expected a loss of 4.333 million barrels for the week.
The API also reported a draw in gasoline inventories of 1.545-million barrels for the week-ending July 9. Distillate stocks saw an increase in inventories this week of 3.699 million barrels for the week.
Today’s U.S. Energy Information Administration (EIA) weekly inventories report is expected to show a crude oil draw down of 4.3 million barrels. If confirmed, the draw would mark a seventh consecutive week of inventory declines.
The disagreement over supply policy within the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, known as OPEC+, led to the end of talks last week on boosting production without agreement.
“If OPEC doesn’t agree to raise supply soon, high oil prices will also likely lead to demand destruction in even more cost-sensitive emerging markets, especially India,” the Eurasia Group said in a note. This could pressure prices.