On Wednesday, oil somewhat lessened as Chinese crude imports dropped to a one-year low. Losses were partially counterbalanced by investor concern over political conflicts in the Middle East. Traders stated that they were focused on rising tensions specifically between Saudi Arabia and Iran.
Brent futures were down 20 cents at $63.49 a barrel at 1305 GMT. U.S. West Texas Intermediate (WTI) futures dropped 13 cents to $57.07 a barrel. Earlier this week, Brent crude reached $64.65. Its highest since mid-2015, after an anti-corruption elimination in main crude exporter Saudi Arabia. China’s October oil imports dropped to 7.3 million bpd from a record-high of about 9 million bpd the month prior, according to data from the General Administration of Customs.
This is the lowest level seen since last October. Li Yan, oil analyst, stated that the decrease of oil imports suggests less purchases from independent refineries, “as many of them are running out of crude quotas for this year.” The price of oil has gained about 14 percent over the last month mostly from the OPEC’s efforts to overcome a global loom of unused crude. “Stronger oil fundamentals and investor inflows have been the catalyst for higher oil prices, but adding further support now is a focus on several geopolitical risks that have been looming over oil markets for a while,” said analysts.
The OPEC 2017 World Oil Outlook revealed that the group forecasts the demand for crude will increase slower than previously anticipated over the next two years, as increased prices from its supply policy fuel output growth from competing producers. “The call on OPEC in 2019 envisaged by OPEC was reduced by 600,000 to a good 33 million bpd, and is expected to remain at roughly this level until 2025,” Commerzbank said. “Currently, OPEC is only producing somewhat less than this amount. This leaves OPEC virtually no scope to expand production in the next eight years.”