Oil prices dropped continuously in Asia due to a weak trade with China. China is the world’s biggest energy user but its crude imports have declined which is hurting the oil prices. The weak batch of trade from China has led to demand fears in Asia. New York’s contract, light sweet crude in November, fell by 11 cents and reached USD 84.12 per barrel and Brent Crude fro December declined by one cent to USD 111.10. The Crude Oil imports to China have been very low as compared to the imports of last year. China is the largest growth engine and its demand of Crude Oil has dropped by 12% in September as compared to last year’s record high and has gone below five million barrels per day for fourth consecutive month. The bearish figures in China signal that the trade surplus in China is going to fall and the economy could see a decline. The trade surplus in China fell continuously for the second consecutive month and it reached USD 14.51 billion. The exports are getting hit sharply due to the economic turmoil in Europe and United States.
The falling Crude prices are being cushioned by some encouraging data from the US department of Energy which showed large drawdowns in gasoline and distillate and stockpiles and world’s biggest oil consumer. The latest report from the US government shows gasoline stockpiles dipping 4.1 million barrels which is 40 times more than the analysts predicted. The Distillates which include diesel as well as heating fuel have seen a fall of 2.9 million barrel as compared to the estimated 4,00,000 barrels.
Bell The Bull says: The Decline In Oil Prices Could Improve Only By The Drawdown in Gasoline and Distillates, While The Consumers Are Still buying