Brent Trades Near One-Week Low as China’s Crude Imports Decline 

oil-company-iraq
  • China’s crude imports drop 13.4% from record in July
  • Russia said to rule out cooperating with OPEC to cut supply
Brent crude traded near the lowest price in more than a week as a slide in China’s oil imports added to signs a global surplus will persist.

Futures were little changed in London after losing 6 percent over the previous two days.China’s imports dropped to 26.59 million metric tons in August, down 13.4 percent from a record the previous month, according to preliminary customs data. Russia on Monday was said to have ruled out cooperation with the Organization of Petroleum Exporting Countries to cut output.

Oil has fluctuated since falling below $45 a barrel two weeks ago as concern over China’s slowing demand fueled volatility in global markets. Iran, OPEC’s fourth-largest producer, has indicated it will boost crude exports to regain market share once international sanctions are lifted, while stockpiles in the U.S. remain almost 100 million barrels above the five-year seasonal average.

“A slowdown in China’s economy has been confirmed once more with today’s trade data,” Will Yun, a commodities analyst at Hyundai Futures Corp. in Seoul, said by phone. “The numbers are bearish for the oil market overall. Concerns keep increasing surrounding Chinese growth amid its efforts to boost the economy.”

Brent for October settlement was at $47.84 a barrel on the London-based ICE Futures Europe exchange, up 21 cents, at 12:26 p.m. Singapore time. The contract lost $1.98 to $47.63 on Monday, the lowest close since Aug. 27. Total volume was about 5 percent above the 100-day average. Prices are down 17 percent this year.

West Texas Intermediate for October delivery decreased as much as $1.91, or 4.2 percent, to $44.14 a barrel from the Sept. 4 close on the New York Mercantile Exchange. Electronic transactions Monday will be booked with Tuesday’s for settlement purposes because of the Labor Day holiday.

China Imports

China’s overseas purchases of oil in August dropped for the first time in three months as slowing fuel demand in the country curbed oil requirements and its refineries cut processing. The nation’s apparent oil demand fell to the lowest level in nine months in July to about 10.15 million barrels a day, according to data compiled by Bloomberg.

Crude imports may have also been impacted by a halt in shipping activity after the Aug. 12 blast at the port of Tianjin. Some oil tankers were still barred from the port in northeast China. Overseas shipments through the Tianjin port accounted for 3.7 percent of the country’s total in the first six months of this year, customs data show.

Russia said it will not work with the 12 members of OPEC to reduce global supplies even after oil prices slumped to the lowest since 2009, the Financial Times reported, citing OAO Rosneft Chief Executive Officer Igor Sechin. Russia is not willing to administer output cuts like OPEC producers as its oil industry is owned by many foreign stakeholders, he said.

Sanctions on Iran will probably be removed within the first three months of 2016, according to four Western diplomats familiar with the nuclear monitoring process. Under terms of a July 14 accord with world powers, the Persian Gulf nation agreed to curb its nuclear program in return for the easing of trade and financial restrictions.

Source: Bloomberg – Brent Trades Near One-Week Low as China’s Crude Imports Decline

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