China crude imports down 15% y/y, Norway gov’t halts strike
Brent crude fell below $99 a barrel on Tuesday over concerns about demand growth after Chinese crude imports weakened in June, while worries of supply disruptions eased after a halt in the labour strike at Norway's oil industry.
China, the world's second biggest crude consumer, imported 15 percent less in June than the same month a year ago, as refiners cut purchases amid slowing oil demand. China accounted for more than half of the world's oil consumption growth last year.
Brent had slipped more than $2 a barrel to hit a low of $98.22 after jumping 2 percent to settle above $100 on Monday on fears the Norway strike would totally shut production at the world's eighth largest crude exporter.
By 0348 GMT, Brent was down $1.98 to $98.34 and U.S. crude fell $1.29 at $84.70 a barrel.
"May data was particularly strong due to strategic stockpiling and this appears to have abated," said Natalie Robertson, a commodities analyst at ANZ, referring to the drop in Chinese crude oil imports for June.
"The initial reaction will be negative because the headline import number doesn't appear that strong, but if you look at it on a historical basis, anything above 20 million tonnes looks supportive."
China is expected to release later this week GDP datavshowing the weakest expansion in three years, which Robertsonvsaid could also help support prices as investors expect thevgovernment to introduce measures to boost the economy.
Brent tumbled at Asia's open after the Norwegian government intervened in a labour strike and ordered a last-minute settlement to prevent a full closure of its oil industry. The strike over pensions, which began on June 24, had cut oil production by about 13 percent.
Iranian threats to block the Strait of Hormuz, through which more than a third of the world's seaborne oil trade passes, in response to Western sanctions had also bolstered oil prices, but Iran's foreign minister on Monday downplayed the threats, saying Tehran was fully committed to resolving the nuclear issue.
But prices could gain support from a fall in U.S. crude stockpiles last week. Crude inventories were forecast to have fallen for the third week in a row in the week to July 6 due to lower imports and higher refinery usage, a preliminary Reuters poll showed on Monday.