Futures Movers: U.S. oil benchmark slips below $80 a barrel after mixed China data

Posted By: EN Todayon: November 07, 2023In: General Energy News, Oil & Gas News

Oil futures slumped early Tuesday to their lowest intraday levels since early August, with the U.S. benchmark trading below the $80-a-barrel threshold, after mixed China data highlighted demand concerns.

Price action

West Texas Intermediate crude
CL00,
-1.61%
for December delivery
CL.1,
-1.61%

CLZ23,
-1.61%
fell $1.34, or 1.7%, to $79.48 a barrel on the New York Mercantile Exchange.
January Brent crude
BRN00,
-1.74%

BRNF24,
-1.74%,
the global benchmark, dropped $1.53, or 1.8%, to $83.65 a barrel on ICE Futures Europe.

Market drivers

Oil traders have fully erased the risk premium priced into crude after the Hamas attack on southern Israel. Crude had rallied following the Oct. 7 attack on fears the Israel-Hamas war could spread across the region, posing a threat to Middle Eastern crude flows and supplies.

Attention has since turned back to the demand side, with the slump Tuesday tied by analysts to China trade data. The figures showed China imported 13.52% more crude in October than a year ago, according to news reports, but the figure was flattered by coronavirus restrictions that were in place in 2022.

At 11.5 million barrels a day, imports were up slightly versus September but remained around 1 million barrels a day below levels seen in the summer, noted Carsten Fritsch, commodities analyst at Commerzbank, in a note.

“This is disappointing in view of the record-high processing. Crude oil imports in the first ten months were a good 14% up year-on-year. The increase appears bigger because of the low basis for comparison, however, as imports were dampened by the coronavirus restrictions last year,” Fritsch said. “It is no surprise therefore that the figures are lending no support to prices today.”