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Oil futures regained their footing Tuesday, erasing losses seen earlier in the session after disappointing international trade data from China sparked worries over demand.
Price action
-
West Texas Intermediate crude for September delivery
CL00,
+0.90% CLU23,
+0.90%
rose 12 cents, or 0.1%, to $82.06 a barrel on the New York Mercantile Exchange, after dipping as low as $79.90 in morning trade. -
October Brent crude
BRN00,
+0.79% BRNV23,
+0.79% ,
the global benchmark, was up 8 cents, or 0.1%, at $85.42 a barrel on ICE Futures Europe. -
Back on Nymex, September gasoline
RBU23,
+1.13%
rose 0.2% to $2.811 a gallon, while September heating oil
HOU23,
+2.33%
was up 1.1% at $3.048 a gallon. -
September natural gas
NGU23,
+1.65%
rose 1.2% to $2.758 per million British thermal units.
Market drivers
China’s outbound shipments fell 14.5% from a year earlier in July, compared with the 12.4% decline in June, the General Administration of Customs said. Chinese imports declined 12.4% from a year earlier in July, compared with June’s 6.8% fall. That left China’s trade surplus at $80.6 billion in July, wider than the $70.62 billion surplus in June and the $70.3 billion surplus expected by economists.
Chinese oil imports, meanwhile, saw a 19% monthly fall to 43.7 million tons, equal to 10.3 million barrels a day, in July on lower domestic demand and higher inventories, said Ewa Manthey and Warren Patterson, commodities strategists at ING, in a note. Still, oil imports are 17% above the previous year’s low base, which was depressed by COVID outbreaks and extensive lockdowns. China’s crude imports are up 12.5% year over year to 326 million tones over the first seven months of 2023.
“Amid a steady rally dating back to late June, fundamentals continue to skew supportive,” said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a note.
Saudi Arabia has pledged to continue a voluntary production cut of 1 million barrels a day, which took effect in July, through the end of September, while Russia has said it would cut exports by 300,000 barrels a day through the end of next month.
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