Oil prices fell on Monday and remained near their multi-month low as recession fears hurt demand prospects and data pointed to a slow recovery of Chinese crude oil imports last month.
Brent oil futures fell 74 cents, or 0.8 percent, to $94.18 a barrel. First-month prices hit their lowest level since February last week, tumbling 13.7 percent and posting their biggest weekly drop since April 2020.
US West Texas Intermediate crude stood at $88.34 a barrel, down 67 cents or 0.8 percent, exacerbating losses after falling 9.7 percent last week.
China, the world’s largest importer of crude oil, imported 8.79 million barrels per day (bpd) of crude oil in July, up from a four-year low in June, but still 9.5 percent lower than a year ago ago, according to customs records.
Chinese refineries were stockpiling amid high crude oil prices and weak domestic margins, even as the country’s overall exports gained momentum.
As a result of lower US gasoline demand, and as China’s zero-COVID strategy further drives the recovery, ANZ has lowered its oil demand forecasts for 2022 and 2023 by 300,000 bpd and 500,000 bpd, respectively.
Oil demand for 2022 is now estimated to increase by 1.8 million bpd year-over-year to 99.7 million bpd, just below pre-pandemic levels, the bank said.
Exports of Russian crude oil and oil products continued to flow despite an impending European Union embargo to come into effect on December 5.
In the United States, energy companies cut the number of oil rigs by the most since September last week, the first drop in 10 weeks.
The US clean energy sector received a boost after the Senate passed a sweeping $430 billion bill on Sunday intended to combat climate change, among other things.