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Oil prices rose early on Wednesday as Chinese data showed crude imports into the world’s top oil importer jumped in May, recovering from a weak April.
As of 8:13 a.m. EDT on Wednesday, ahead of the EIA weekly inventory report, WTI Crude prices were up by 0.99% at $72.45. The international benchmark, Brent Crude, traded at $76.98, up by 0.94% on the day.
Following a slump on Tuesday, oil prices recovered some of the losses early on Wednesday, as China’s data showed crude oil imports jumped in May by 12.2% year-on-year and by 17.4% compared to April. China imported a total of 12.11 million barrels per day (bpd) of crude in May, data from the General Administration of Customs showed, as refiners returned from maintenance and moved to stockpile crude.
The building of crude inventories has supported crude oil imports and demand despite the mixed macroeconomic data coming out of China in recent weeks.
“Demand slowdown from China has been a major concern for the crude oil market recently, and a recovery in oil imports is likely to provide some comfort to the oil market,” ING strategists Warren Patterson and Ewa Manthey said on Wednesday.
“Higher refinery utilisation has also increased refined product supplies in the Chinese market, with China reverting to being a net exporter of refined products last month.”
Oil prices recovered early on Wednesday, helped by the higher Chinese crude imports and the market shifting focus from macroeconomic concerns to a looming supply deficit in the second half of the year.
On Tuesday, concerns about the economy erased all the Saudi cut-induced gains from Monday. The 1 million bpd Saudi cut has failed to move oil prices in any meaningful way so far. In addition, a bearish industry report on inventories from the American Petroleum Institute (API) also weighed on prices on Tuesday. Although the API reported a crude inventory draw, it also found that gasoline and distillate inventories increased.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.