RIYADH: Oil dropped by more than 1 percent on Monday after weaker than expected Chinese economic growth fueled concern over demand in the world’s second-biggest oil consumer.
China’s gross domestic product grew 6.3 percent year on year in the second quarter, compared with analyst forecasts of 7.3 percent, with its post-pandemic recovery faltering rapidly owing to weakening demand at home and abroad.
Brent crude fell $1.32, or 1.7 percent, to $78.55 a barrel by 11:42 a.m. Saudi time, while US West Texas Intermediate crude dropped by $1.22, or 1.6 percent, to $74.20 on a second straight day of losses for both contracts.
Both benchmarks had notched three weeks of gains and touched their highest since April last week, finding support from output curbs of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, and unplanned outages in Libya and Nigeria.
Oil demand in JODI countries climb in May amid fall in crude output: JODI
Oil demand in countries which report to the Joint Organization Data Initiative reported a rise of 3 million barrels per day month on month in May, the latest data released by the insitution has revealed.
According to the JODI report, the rise in oil demand was driven by China, India, Saudi Arabia, and the US.
The report further noted that crude oil production in JODI reporting countries fell by 0.8 million bpd in May, driven by lower production in Saudi Arabia, Canada, and the US.
Moreover, crude inventories in JODI countries fell by 10 million barrels and stood 324 million below the five-year average, while the product inventories rose by 32 million barrels and stood 25 million below the five-year average.
The report noted that Saudi Arabia’s crude oil production fell by 502,000 bpd in May to 9.96 million bpd.
On the other hand, the Kingdom’s crude exports in May also dropped by 388,000 bpd to 6.93 million bpd.
Russia on track to fulfilling August oil export cut
Russia is set on meeting its plan to cut oil exports in August by 500,000 bpd, the Kommersant newspaper reported on Monday.
The newspaper said Russia’s oil exports by sea may fall to 2.9-3 million bpd in August, mainly due to export cuts at the country’s Baltic ports.
The reductions were made by adjusting the third quarter export schedule of state-owned pipeline operator Transneft, Kommersant reported.
Russia announced the planned cuts earlier this month, as it looked to nudge up global oil prices in concert with Saudi Arabia.
China’s daily oil throughput rises in June
China’s daily oil refinery throughput in June rose 1.6 percent from a month ago, official data showed on Monday, as refiners resumed operations after completing spring maintenance and ramped up production to meet summer travel demand.
Total refinery throughput in the world’s second-largest oil consumer was 60.95 million tons last month, equivalent to 14.83 million bpd, data from the National Bureau of Statistics showed.
June’s figures represent a marginal increase on the 14.6 million bpd rate seen in the prior month, although they surged by 10.2 percent from a low base in the same period last year.
For the first half of 2023, China processed a total of 363.6 million tons of crude oil, or 14.66 million bpd, up 9.9 percent year on year, according to the data.
June saw the completion of almost all planned refinery maintenance for the spring season. Only four major state-backed refineries are undergoing or will shut down for overhauls in July and August.
NBS data also showed China’s crude oil production in June was 17.52 million tons, or about 4.26 million bpd, versus 17.2 million tons in the same month of 2022.
For the first six months of 2023, China’s oil output reached 105.05 million tons, the highest level since 2015.
Natural gas production was up 5.5 percent to 18.3 billion cubic meters from the year-ago period’s 17.3 bcm.
(With input from Reuters)
