Worries over China's recovery weigh on Brent

The front-month ICE Brent contract has inched lower by $0.25/bbl on the day, to $76.25/bbl at 09.00 GMT.

PHOTO: Sinopec's Hainan refinery in China. Sinopec

Upward pressure:

China's decreasing crude imports and global macroeconomic worries may prompt OPEC+ producers to announce further cuts in supply this year, according to analysts.

A number of major Canadian oil and gas producers have halted operations as safety precautions following raging wildfires in the west of the country. This has shut off over 200,000 b/d of oil equivalent from the market. Most companies are uncertain about when production will resume.

Downward pressure:

China has reported a decline in crude oil imports, which indicates stagnant domestic demand and casts doubt over the economic recovery of the world's largest oil consumer.

China’s crude oil imports have slipped 16% lower on the month, to 10.3 million b/d in April, according to Reuters citing official customs data. It was also a 1.45% drop from the same month last year.

The White House and Republican lawmakers in the US remain in a deadlock over raising the debt ceiling. The White House's economic advisors have warned of a financial crisis akin to the "great recession" of 2008 if the US defaults on its debt payments.

By Konica Bhatt

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