Crude oil hits a low as China fears increase

Crude oil futures touched multi-month lows yesterday after a weekend of mixed data from China showing higher oil imports in July but weaker trade figures overall.

Brent then edged up 24 cents to $48.85, after dipping to $48.24 earlier in the session, the lowest in over six months.

US crude was down 2 cents at $43.85 after hitting an intraday low of $43.35 in Asian trading. Both benchmarks have been falling for six weeks, hampered by a supply glut.

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“The market remains in a battle between the bearish current fundamentals and the perception that the market will begin to rebalance in the not too distant future,” said Dominick Chirichella of the Energy Management Institute.

China’s crude oil imports rose by 4.1 per cent in July from June, but this bullish news was partly offset by broader trade figures showing an 8.3 per cent slump in exports, stoking fears that Chinese economic activity was slowing.

Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt, said that China had probably taken advantage of much lower oil prices to rebuild its stocks in July: “They had fallen to a one-year low in June on account of record oil processing, so a top-up was needed.”

Since the start of August, however, there have been signs that Asian crude demand is slow- ing.

Two OPEC delegates said the group had no plans to hold an emergency meeting to discuss the drop in oil prices before its next scheduled gathering in December.

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