Global crude prices have advanced more than 12% this year as the Organisation of the Petroleum Exporting Countries and allies curtailed supply to shore up the market, and traders bet that US monetary policy would ease. Against that backdrop, key metrics suggest tightness in the near term, and US crude stockpiles just tumbled. Still, conditions in China — which accounts for one barrel in six of global oil consumption — remain a point of concern.
The global oil market faces soft spots in the outlook for Chinese demand this half, potentially adding a headwind for crude prices.
Taken together, a slower-than-expected return of refineries from seasonal maintenance, softer purchases from some key suppliers in July, and a potential drop off in monthly import volumes suggest that there’s a lack of vigor in the world’s largest crude importer, offsetting strength elsewhere.
