Falling Chinese Imports Hold Back Oil
08 Novembro 2017 - 10:00AM
Dow Jones News
By Christopher Alessi
LONDON--Oil prices were mainly flat Wednesday morning after weak
Chinese data and receding geopolitical risk factors.
Brent crude, the global benchmark, was up 0.11%, at $63.76 a
barrel on London's Intercontinental Exchange. On the New York
Mercantile Exchange, West Texas Intermediate futures were trading
down 0.14% at $57.12 a barrel.
Chinese customs data released Wednesday morning showed oil
imports at roughly 7.3 million barrels a day in October, down from
9 million barrels a day the month prior--the "weakest monthly
imports seen since October 2016," according to Dutch bank ING
Groep.
Giovanni Staunovo, a commodities analyst at UBS Wealth
Management, called China's import contraction surprising.
"Considering that China was one of the countries removing excess
production from the market, there is a concern if this trend
continues," he said.
At the same time, the market appeared to consolidate some of the
record gains of recent days, as concerns over political turmoil in
Saudi Arabia faded.
Crude prices earlier in the week hit two-year highs--with Brent
nearly breaching $65 a barrel--after Saudi Crown Prince Mohammed
bin Salman had more than five dozen princes, ministers and
prominent businessmen detained in an alleged corruption crackdown
over the weekend.
But the upheaval is "not affecting oil production" and there is
"no change on the oil policy side," Mr. Staunovo said, suggesting
Saudi Arabia would continue to abide by an OPEC-led agreement to
curb production.
The market also cooled in response to an updated forecast
Tuesday from the U.S. Energy Information Administration, upping its
supply growth projection to 720,000 barrels a day for 2018. U.S.
crude production is now expected to average 9.95 million barrels a
day next year.
"The U.S. shale machine is poised to shift up a gear as
producers make hay amid the improving price backdrop," said Stephen
Brennock, an analyst at brokerage PVM Oil Associates Ltd.
Oil market participants will be watching for inventory data
Wednesday from the EIA to assess whether the amount of crude oil in
storage has continued to decline. Traders and analysts surveyed by
The Wall Street Journal on average expect crude stockpiles to have
fallen by 2.1 million barrels in the week ended Nov. 3.
Among refined products, Nymex reformulated gasoline
blendstock--the benchmark gasoline contract--was down 0.19%, at
$1.81 a gallon. ICE gasoil, a benchmark for diesel fuel, changed
hands at $563.75 a metric ton, up 0.09% from the previous
settlement.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
November 08, 2017 06:45 ET (11:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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