In October, Chinese crude oil imports saw solid growth compared to a year ago and the previous month. However, China’s total exports contracted at a faster pace than expected.
In October, Chinese crude oil imports saw solid growth compared to a year ago and the previous month. However, China’s total exports contracted at a faster pace than expected.
The prices of Petroleum are experiencing a sharp drop this Tuesday, reaching new lows of two and a half months. This downward trend is due to a mix of contradictory economic data coming from Chinawhich is offsetting the impact of the recent extension of production cuts announced by Saudi Arabia and Russia.
Brent futures show a loss of US$2.20, equivalent to 2.5%, standing at US$82.94 per barrel. Simultaneously, the West Texas Intermediate (WTI) in the United States experienced a decrease of US$2.17, equivalent to 2.7%, standing at US$78.60 per barrel. Both prices have reached their lowest levels since the end of August.
A relevant fact is that the premium of the current Brent contract compared to six-month forward contracts has also reached its lowest level in two and a half months.. This indicates that market players are showing less concern about the current supply deficit in the oil market.
Oil: data from China
In October, Chinese crude oil imports saw solid growth compared to a year ago and last month. However, total exports of the Asian giant contracted at a faster rate than expected. Additionally, expectations of a reduction in production by China-based refiners between November and December could further limit oil demand and exacerbate the price decline.
Meanwhileworld stock markets, which often follow a similar trend to oil, are losing momentum due to waning investor enthusiasm for global interest rates. In additions, the dollar is gaining ground from its recent lows, making crude oil more expensive for holders of other currencies.
Regarding oil supply, the markets are watching themselves Saudi Arabia and Russia are willing to voluntarily reduce production beyond the end of the year, in addition to a possible broader agreement among the OPEC+ group of producers. Kelvin Wong, senior market analyst at OANDA, suggests thate OPEC+ will not rush to reverse production cuts when its joint ministerial oversight committee meets on November 26.
Source: Ambito
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