Oil Prices Fall Amidst Concerns Over Global Demand Recovery
Oil prices edged lower on Tuesday as concerns about the fragile state of the global recovery in demand for crude and fuels were heightened by data showing China’s oil imports fell in May.
Brent crude was down 11 cents, or 0.2%, at $71.38 a barrel by 0151 GMT, after declining 0.6% overnight.
China’s crude imports were down 14.6% in May, from a high level a year earlier, with daily arrivals at the lowest level this year, as maintenance at refineries limited demand for oil purchases.
“Chinese oil imports at a five-month low … would tend to confirm weakness in the Asia market,” Bob Yawger, director of energy futures at Mizuho Securities.
Crude prices have risen in recent weeks, with Brent up by nearly 40% this year and WTI gaining more than that, amid expectations of demand to return as some countries succeed in vaccinating populations against COVID-19.
Restraint on supply by the Organization of the Petroleum Exporting Countries and allies has also helped buttress prices.
Additionally, investors are looking out for the fifth round of talks on Iranian supply that is bound to happen later in the week. Analysts expect Iran to increase its production by 500,000 to 1 million barrels per day once sanctions are lifted.
However, major crude importers like India have been going through waves of infections that continue to threaten the expected pickup in global demand in the second half of this year.
Investors now await crude supply data from the American Petroleum Institute, due later in the day.