Oil prices fall as China demand data disappoints

LONDON, Oct 24 (Reuters) – Oil prices fell on Monday after Chinese data showed demand from the world’s biggest crude importer was sluggish in September as tougher Covid-19 policies and fuel export curbs dampened consumption.

Brent crude futures for December settlement were down $1.17, or 1.3%, at $92.33 a barrel by 1217 GMT, after rising 2% last week. US West Texas Intermediate crude for December delivery was at $83.65 a barrel, down $1.40, or 1.7%.

Although higher than in August, China’s September crude imports of 9.79 million barrels per day were 2% lower than a year earlier, customs data showed on Monday, as independent refiners curbed performance amid thin margins and sluggish demand.

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“The recent recovery in oil imports faltered in September,” ANZ analysts said in a note, adding that independent refiners failed to use increased quotas as ongoing COVID-related lockdowns weighed on demand.

Uncertainty over China’s zero-covid policy and an asset crunch are undermining the effectiveness of pro-growth measures, ING analysts said in a note, even as third-quarter GDP growth beat expectations.

Although US President Joe Biden announced last week that he would sell the remaining 15 million barrels of oil from the US Strategic Petroleum Reserve, part of the 180 million barrel release that began in May.

Biden added that his goal would be to replenish stocks when U.S. crude oil hits $70 a barrel.

But bank Goldman Sachs said the share issue is unlikely to have a major impact on prices.

“Such a release would have only a moderate impact on oil prices (<$5/bbl)," the bank said in a note.

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U.S. energy companies added oil and natural gas rigs last week for a second straight week as relatively high oil prices encouraged companies to drill more, energy services company Baker Hughes Co said in a report.

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Additional reporting by Florence Tan; Editing by Mike Harrison, Louise Heavens and John Harvey

Our Standards: Thomson Reuters Trust Principles.

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