The latest reports indicate that oil futures lost ground on January 14, 2021. The loss comes on track for back-to-back losses as the investors reacted to data that showed a December slowdown in the pace of Chinese crude imports.
West Texas Intermediate (WTI) crude for February delivery lost 33 cents, which translates to a drop of 0.6% to trade at $52.58 per barrel on the New York Mercantile Exchange. The March Brent crude, which is the global benchmark dropped 40 cents or around 0.7% to trade at $55.66 per barrel on the ICE Futures Europe.
China’s crude imports plunged to a 27-month low of 9.096 million bpd in December, according to news reports. However, the total 2020 imports spiked 7% to 10.86 million barrels per day on average.
This decline sounded ‘alarm bells’ said Eugen Weinberg, commodity analyst at Commerzbank, in a note. He added:
“It is quite possible, just like with base metals, that Chinese traders and refineries imported more crude oil than they needed — partly for strategic storage reasons and partly on speculative grounds — and that imports will therefore slow this year.”
OPEC, in a monthly report, left its forecast for world oil demand growth in 2021 unchanged from its December estimate. The cartel anticipates that crude demand will only recover partially from the 9.8 million barrel decline that was suffered in 2020 as a result of the COVID-19 pandemic.
The oil-producing nations stated that it expects demand growth to surge to 95.9 million barrels daily this year, up 5.9 million barrels per day.