Oil prices were down over 2% on Monday as demand in leading crude importer China remained weak in September due to tight COVID restrictions and fuel-export limits weighing on consumption.
Brent crude futures fell nearly 2% to $89.56 per barrel, having gained as much as 2% in the past week, while the US West Texas Intermediate (WTI) crude futures declined 2.2% to $83.21 per barrel.
The global oil benchmark climbed last week, despite US President Joe Biden’s move to sell the remaining 15 million barrels from the Strategic Petroleum Reserve (SPR). The 15 million was part of the 180-million reserve oil that the White House started releasing in May.
Biden also announced restocking plans that would only be carried out once US crude prices are trading around $70 per barrel.
China’s Weak Fuel Demand Continues
China’s crude oil imports in September were up from August but remained below 2%, with independent refiners holding back the country’s throughput amid lower refinery margins and slow demand.
Data from the General Administration of Customs China (GACC) showed on Monday that the world’s largest crude importer brought in 40.24 million tons of crude oil in the previous month, or approximately 9.79 million barrels per day (bpd).
The latest figure was higher than the 9.5 million bpd imported in August, although it still ended lower than the almost 10 million bpd recorded in 2021.
Crude oil imports also slipped 4.3% from the same period last year to 370.4 million tons for the first nine months of this year, the first annual slump for this period since 2014.
China’s fuel demand continued to be pressured by Beijing’s strict measures to contain COVID-19, which has weakened travel and manufacturing activities.
However, state-run refiners increased the country’s net fuel exports to a 15-month high in September, pushing it up by 17% from the previous month to 3.37 million tons, as refineries resumed operations after outages and seasonal maintenance.
Still, independent refiners, which represent around one-fifth of China’s crude oil imports, continued to weigh on output.
Analysts said independent refiners were unable to use higher quotas as ongoing COVID restrictions curbed demand, which was dragged further down by lower refinery margins and product export limits.
