Oil futures fell Tuesday, under pressure after disappointing international trade data from China sparked worries over demand.
Price action
-
West Texas Intermediate crude for September delivery
CL00,
-1.83% CL.1,
-1.83% CLU23,
-1.83%
fell $1.35, or 1.6%, to $80.39 a barrel on the New York Mercantile Exchange. -
October Brent crude
BRN00,
-1.70% BRNV23,
-1.70% ,
the global benchmark, dropped $1.51, or 1.8%, to $83.83 a barrel on ICE Futures Europe.
Market drivers
China’s outbound shipments fell 14.5% from a year earlier in July, compared with the 12.4% decline in June, the General Administration of Customs said. Chinese imports declined 12.4% from a year earlier in July, compared with June’s 6.8% fall. That left China’s trade surplus at $80.6 billion in July, wider than the $70.62 billion surplus in June and the $70.3 billion surplus expected by economists.
Oil imports, meanwhile, saw a 19% monthly fall to 43.7 million tons, equal to 10.3 million barrels a day, in July on lower domestic demand and higher inventories, said Ewa Manthey and Warren Patterson, commodities strategists at ING, in a note. Still, oil imports are 17% above the previous year’s low base, which was depressed by COVID outbreaks and extensive lockdowns. China’s crude imports are up 12.5% year over year to 326 million tones over the first seven months of 2023.
China’s exports of refined products rose 56% year over year to 5.3 million tons in July, the ING strategists noted, as China attempts to make up for weaker domestic consumption, particularly industrial demand for diesel.
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