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Oil Prices Slid More Than 1% On Monday as China Demand Data Disappoints

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Oil Prices Slid More Than 1% On Monday as China Demand Data Disappoints

(CTN News) – Oil prices fell more than 1% on Monday as statistics from China revealed that the world’s top oil importer’s demand was subpar in September due to rigorous COVID-19 rules and restrictions on fuel exports.

After increasing 2% the previous week, Brent oil futures for December settlement fell $1, or 1.1%, to $92.50 a barrel at 0609 GMT. American West, Texas Intermediate oil for December delivery was down $1.03 or 1.2% at $84.02 a barrel.

According to customs statistics released on Monday, although higher than in August, China’s crude imports in September, at 9.79 million barrels per day, were 2% lower than they had been a year earlier. This was because independent refiners limited throughput due to thin margins and weak demand.

According to ANZ analysts, “the recent improvement in oil imports collapsed in September,” and independent refiners failed to use higher quotas since the demand was still affected by continuing COVID-related lockdowns.

Falling refinery profits and export restrictions “exacerbated this,” the experts said.

In September, Saudi Arabia and Russia were tied as China’s top two suppliers.

Even though China’s third-quarter gross domestic product (GDP) growth is above estimates, ING analysts said in a note that uncertainty surrounding the country’s zero-COVID policy and the housing crisis are weakening the impact of pro-growth initiatives.

The GDP figures were released on the day after China’s Xi Jinping won a record-breaking third term as president Sunday, solidifying his position as the nation’s most powerful leader since Mao Zedong.

Even though US President Joe Biden announced the sale of the last 15 million barrels of oil from the US Strategic Petroleum Reserves, Brent increased last week. A record 180 million barrel discharge that started in May includes the transaction.

When U.S. Oil is trading at $70 per barrel, Biden said his goal is to rebuild reserves.

According to ANZ, “Biden’s remarks that the United States would only purchase oil if prices reach USD70/bbl offers a firm support level.”

Due to the relatively high oil prices that encourage companies to drill more, U.S. energy companies added oil and natural gas rigs for the second week last week, according to a report released on Friday by energy services company Baker Hughes Co.

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