According to preliminary results from the General Administration of Customs and Mintec’s analysis, China’s crude petroleum oil imports fell by 18.8% month-on-month (m-o-m) in July to an average of 10.33m barrels per day (bpd). The figure represents a year-on-year (y-o-y) increase of 17%.
July’s preliminary result brings imports back to January and April 2023 levels and constitutes the first monthly fall after two successive months of increases. The monthly decrease coincides with weakening manufacturing data in China, with the manufacturing PMI decreasing to 49.2 in July from 50.5 in June, thereby swinging into contraction territory. Additionally, China slipped into deflation, at -0.3% y-o-y, for the first time since early 2021. This economic data and the import fall caused concern among market players about China’s future oil demand as the world’s largest oil importer.
Although Brent crude oil [Mintec Code: BCRD] is up 6.2% m-o-m, closing at $86.40/barrel on 10th August, industry sources indicate that the price will decrease in the coming weeks as the market digests Chinese import and economic data.