Oil prices fell on Wednesday over fresh concerns about demand after data showed that China’s first-half crude imports dropped, but were still holding near a one-week high amid worries about supplies as the world recovers from the coronavirus pandemic.
West Texas Intermediate was down 24 cents, or 0.32%, at $74.96 a barrel, having jumped 1.6% in the previous session.
China’s crude imports dropped by 3% from January to June compared with a year earlier, the first such contraction since 2013, as import quota shortages, refinery maintenance and rising global prices curbed buying.
“Imports were scaled back as surging prices for crude oil have eroded refinery profit margins,” Eurasia Group said in a note.
“If OPEC doesn’t agree to raise supply soon, high oil prices will also likely lead to demand destruction in even more cost-sensitive emerging markets, especially India,” Eurasia said.
Disagreement over supply policy within the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, known as OPEC+, led to the end of talks last week on boosting production without agreement.
“Oil is unlikely to break out of its July highs until some clarity appears over resolving the… production standoff,” said Jeffrey Halley, senior market analyst at OANDA.
The International Energy Agency said global withdrawals from storage in the third quarter were set to be the most in at least a decade, pointing to early June stock draws from the United States, Europe and Japan.
U.S. stockpiles of oil and gasoline inventories fell last week, according to two market sources on Tuesday, citing American Petroleum Institute figures.
Crude inventories declined by 4.1 million barrels for the week ended July 9, the sources said, which would be their eighth straight weekly fall.