China is the world’s largest crude oil importer. Recently, China’s economic slowdown and reduced demand have affected the global oil market. As a result, global oil prices fell in the second session on Monday. Reuters news.
On the other hand, the head of Saudi Aramco, the world’s top exporter, said that they are ready to increase production.
Brent crude futures were down 89 cents, or 0.9 percent, at $97.26 a barrel. In addition, US benchmark West Texas Intermediate (WTI) crude was at $91.03 per barrel in the first session on Monday, down $1.06, or 1.2 percent, after falling 2.4 percent in the previous session.
China’s economy unexpectedly slowed in July, official data showed. Meanwhile, refinery production fell to 12.53 million barrels per day. This is the lowest since March 2020.
Heron Lin, an economist at Moody’s Analytics, said, ‘Government data shows that oil demand is weakening. Because domestic supply and consumer demand are being constrained by record high oil prices.
Analysts say oil demand is likely to remain subdued for the rest of the year. Because the threat of covid-19 restrictions encourages precautionary savings and reduces oil consumption.
Aramco Chief Executive Amin Nasser told reporters on Sunday that Aramco is ready to increase crude oil production to a maximum of 12 million bpd if requested by the Saudi Arabian government.
Nasser added, “We are confident of our ability to ramp up to 12 million bpd at any time if there is a call from the government or the Ministry of Energy to increase our production.” China may ease Covid-19 restrictions. Also, pickups in the aviation industry could increase demand. This is likely to increase the demand for fuel oil.
An oil pipeline was damaged, disrupting production at several offshore sites in the Gulf of Mexico. Due to which the price of oil in the world market increased by more than 3 percent last week.
Some producers resumed production that had been suspended as the damaged pipeline in the Gulf of Mexico was repaired late Friday night, an official in the US state of Louisiana said.
Global oil markets were supported by tight supply this winter due to European Union sanctions on Russian crude and refined product supplies.
More supplies could come if Iran and the United States accept a European Union proposal to revive the 2015 nuclear deal, analysts said. The proposal would lift sanctions on Iran’s oil exports.