Oil prices dip despite US inventory drop, eyes on China demand
Oil prices on the New York fuel exchange are declining for another session despite data showing a decrease in crude oil inventories in our country, which would typically indicate an increase in demand, according to brokers.
10:02 AM EDT, July 17, 2024
A barrel of West Texas Intermediate crude oil for August delivery costs $80.67 on NYMEX in New York, down 0.11%. Meanwhile, Brent oil on ICE for September is priced at $83.63 per barrel, down 0.12%.
Industry estimates indicate another decline in crude oil inventories in the USA. The American Petroleum Institute (API) reported that last week, inventories decreased by 4.44 million barrels. According to API calculations, inventories at the Cushing hub dropped by 746,000 barrels during this time.
What's happening in China? investors' attention on the middle kingdom
According to the API report, gasoline inventories increased slightly by 365,000 barrels, while distillate fuels rose significantly by 4.92 million barrels.
Meanwhile, investors are concerned about the weak demand for crude oil from China, the world's largest importer of this resource.
The weaker Chinese economic data "cast some doubts on whether market participants are being overly optimistic" regarding China’s oil demand outlook - said Jun Rong Yeap, market strategist at IG Asia Pte Ltd.
As he stated, the hopes for more substantial economic stimulus from China after the Third Plenum of the Chinese Communist Party had also somewhat faded.
The Third Plenum of the Chinese Party, taking place this week, is usually a forum for adopting long-term political and economic reforms. However, observers generally believe that major initiatives to support economic growth in China are unlikely this time.
Meanwhile, Russia plans to make additional cuts in oil production to compensate for pumping above the set quota under the OPEC+ alliance.
Sources close to the matter indicate that additional production cuts could occur in the summer and early fall when Russia needs less oil for domestic consumption.
