Oil prices slide as China demand data disappoints

SINGAPORE – Oil prices fell on Monday after China released much-delayed trade data which showed that demand in the world’s largest crude importer remained lacklustre in September as strict COVID-19 policy and fuel export curbs depress consumption.

Brent crude futures for December settlement slid 40 cents, or 0.4%, to $93.10 a barrel by 0340 GMT after rising 2% last week. U.S. West Texas Intermediate crude for December delivery was at $84.66 a barrel, down 39 cents, or 0.5%.

Despite rising from August, China’s crude imports in September of 9.79 million barrels per day were 2% below the amount brought in a year earlier, customs data showed on Monday, as independent refiners curbed throughput amid thin margins and lacklustre demand.

“The recent recovery in oil imports faltered in September,” ANZ analysts said in a note, adding that independent refiners failed to utilise increased quotas amid ongoing lockdowns weighing on demand.

“This was exacerbated by falling refinery margins and product export curbs,” they said.

Uncertainty over China’s zero-COVID policy and property crisis loomed despite better-than-expected growth in the country’s third-quarter GDP, undermining the effectiveness of pro-growth measures, ING analysts said in a note.

The data came a day after China’s Xi Jinping secured a precedent-breaking third leadership term on Sunday, cementing his place as the country’s most powerful ruler since Mao Zedong.

Brent rose last week despite U.S. President Joe Biden announcing the sale of a remaining 15 million barrels of oil from the U.S. Strategic Petroleum Reserves. The sale is part of a record 180 million-barrel release that began in May. Biden added that his aim would be to replenish stocks when U.S. crude is around $70 a barrel.

“Biden’s comments that the U.S. will only buy crude once prices hit USD70/bbl provides a strong support level,” ANZ said.

Last week, U.S. energy firms added oil and natural gas rigs for the second week in a row as relatively high oil prices encourage firms to drill more, energy services firm Baker Hughes Co said in a report on Friday.