Brent crude prices slipped on Monday as a slump in Chinese imports pointed to lower fuel demand in the world’s biggest energy consumer, outweighing falling US oil rig counts and signs of healthy US growth.
China’s trade performance slumped in January. Exports fell 3.3 per cent from a year earlier while imports tumbled 19.9 per cent, highlighting a deepening slowdown.
Global benchmark Brent crude oil for March was down 25 cents at $57.55 a barrel by 0845 GMT after rising as high as $59.06 earlier in the session. US crude was up 15 cents at $51.84 a barrel, having hit a session high of $53.40.
While overall Chinese crude import figures remained high, analysts said signs of a slowdown were weighing on prices.
“Opportunistic buying waned in January as a combination of weak demand, high inventories and tight credit conditions impacted import demand,” ANZ bank said on Monday.
“When China stops filling up its SPR (strategic petroleum reserves), it would definitely put a bearish note to prices,” said Daniel Ang of Singapore-based Phillip Futures.
Preliminary Chinese January customs data came in at 27.22 million tonnes of crude imports, though estimates from Thomson Reuters Research and Forecasts put the final figure at about 30 million tonnes.
Falling US oil rig counts and signs of strong US economic growth helped offset the impact of the Chinese data on oil prices, which have dropped more than 50 per cent since June.
“It’s still the same pattern (as last week),” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. “Markets are ignoring the bearish news and rather trade on the bullish news.”
Brent rose more than 9 per cent last week, its biggest weekly rise since February 2011. The North Sea oil futures contract has climbed more than 18 per cent in the past two weeks, its strongest showing since 1998.
The number of US oil rigs fell to its lowest level since December 2011, a sign of the pressure of tumbling prices on oil producers to curb spending.
Stronger-than-expected growth in US jobs in January also helped support oil, as non-farm payrolls increased 257,000, outstripping Wall Street forecasts.
Reuters technical analyst Wang Tao said crude charts suggested the increase in prices may have ended for a while.
“I prefer a bearish bias,” Wang Tao told Reuters Global Oil Forum. “Both WTI and Brent may correct in this week before seeking their next direction.”