China Oil Demand Concerns: Supply cuts still matter. On Wednesday, the price of oil went down. They lost their day-before profits. Poor trade and inflation data increased concerns about China, which buys most of the oil. Saudi Arabia and Russia cutting oil output made consumers less worried about scarcity.
At 06:15 GMT, the cost of a barrel of Brent oil went down by 21 cents, which is 0.2%, and is now $85.96. At the same time, the cost of U.S. West Texas Intermediate (WTI) oil went down by 21 cents, which is 0.2%, and is now at $82.71 for each barrel. Both contracts rose about $1 yesterday.
China’s economy and gasoline use may be holding down oil prices. Sunward Trading’s Chief Analyst, Chiyoki Chen, shared the same fears and said that rising interest rates in the U.S. and Europe may reduce oil demand, making the oil market less appealing. By month’s end, Chen anticipated a WTI price of $75$85 per barrel.
Six weeks of higher standards is the longest winning streak from December 2021 to January 2022. This tendency is crucial, OPEC+ decreased oil supply, and investors expected China’s oil consumption to climb due to loosened policies bolstered oil prices.
On Wednesday, Chinese inflation data showed that consumer prices fell in July. This is the first year-over-year drop since February 2021. The nation is struggling to recover from the epidemic.
China’s July crude oil imports dropped 18.8% from June, according to gloomy trade statistics issued on Tuesday. This increased economic anxiety. The daily imports dropped to their lowest since January. Major importers decreased their exports while boosting their local storage. U.S. crude oil storage rose by 4.1 million barrels last week. The experts should have considered this.
According to the EIA, U.S. crude oil output will rise to 12.76 million barrels per day (bpd) by 2023. Tuesday will provide research details; 850,000 extra barrels daily is a substantial increase. The previous record was 12.3 million barrels per day in 2019.
Since June, The EIA says Saudi Arabia has been cutting output, and global oil demand is rising. Saudi Arabia, which produces the most oil, decided to cut production by 1 million barrels per day until September. After then, the monarchy predicted growth. Russia also announced a September 300,000 barrel-per-day oil supply cut.
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Our Reader’s Queries
What is the outlook for the Chinese oil industry?
The consultancy predicts that domestic production will drop by 0.8% to 3.94 million bpd next year, followed by a gradual decline in the years to come. On the other hand, Rystad anticipates a 1% increase to 4.22 million bpd in 2023, but they are less confident about growth after 2024.
What is the projection for China oil consumption?
On Thursday, a research institute affiliated with China National Petroleum Corp (CNPC) projected that China’s oil demand will reach its highest point by 2030, with an estimated range of 780 to 800 million metric tons annually.
Why is China buying all the oil?
China’s demand for oil is driven by its position as the top producer of petrochemicals, derived from oil and natural gas. Lin Boqiang, energy studies dean at Xiamen University in China, believes that China’s dependency on oil imports is unlikely to change.
Is China Stockpiling oil?
China is ramping up its oil reserves from nations targeted by US sanctions. FOX News’ Bret Baier reveals China’s move to boost its oil supplies on ‘Special Report.’ The Energy Department is requesting bid prices for the addition of approximately 3 million barrels to the strategic petroleum reserve.