TOKYO: Oil prices fell on Wednesday on fears about future demand as data indicated a drop in China’s first-half oil imports, but they were still near a one-week high amid supply concerns as the world recovers from the coronavirus outbreak. After gaining 1.8 percent on Tuesday, Brent crude was down 8 cents, or 0.1 percent, at US$76.41 a barrel by 0141 GMT. After rising 1.6 percent the previous day, West Texas Intermediate was down 13 cents, or 0.2 percent, at US$75.12 a barrel.
China’s oil imports fell 3% from January to June compared to the same period last year, the first dip since 2013, as import quota constraints, refinery maintenance, and rising global prices stifled demand.
“Imports have been curtailed as rising crude oil prices have impacted refinery profit margins,” Eurasia Group wrote in a note.
“High oil prices will certainly lead to demand destruction in even more cost-sensitive emerging markets, especially India,” Eurasia said if OPEC does not agree to expand production soon.
The Organization of Petroleum Exporting Countries (OPEC), Russia, and other producers, known as OPEC+, failed to reach an agreement on expanding output last week due to disagreements on supply policy.
The International Energy Agency predicted that worldwide storage withdrawals in the third quarter would be the highest in at least a decade, citing early June stock draws in the US, Europe, and Japan.
According to two market sources citing American Petroleum Institute numbers on Tuesday, U.S. oil and gasoline inventories dropped last week.
Crude inventories fell by 4.1 million barrels for the week ending July 9, according to sources, marking the seventh consecutive weekly drop.
(Aaron Sheldrick contributed reporting, and Kenneth Maxwell edited the piece.)/n
