Forbes Piece: Crude Prices Keep Rising Despite Bearish News From China
[Note: This story is also published at Forbes.com]
AAA reports that the average price for regular gas at the pump hit $3.825 on August 9, the highest level seen in 2023, amid growing concerns that global oil markets are undersupplied by as much as 2 million barrels per day (bpd). In contrast to the dramatic spike of almost $2.00 per barrel seen in 2022, when the gas price hit an all-time high of $5.11 in June of that year, 2023 has seen a slow and steady rise of about $.80 per barrel since January 1.
As is almost always the case, the runup in gas prices can be linked to a simultaneous increase in crude prices, as the international Brent index has jumped by about 18% since mid-June. The Brent and domestic WTI prices rose again overnight even in the wake of seemingly bearish news from China, which reports that its own crude imports dropped by 18.8% month-over-month during July. That indicates that the robust Chinese economic growth rate of 6.3% seen during April and May could be slowing down, stalling crude demand in the world’s largest oil-importing nation. China ranks as the second-largest consumer of crude oil behind on the U.S.
China had reported June imports of 12.67 million bpd, an all-time record high for that country, but said its imports fell to 10.29 million bpd in July. At the same time, though, China’s refineries saw a rise in processing rates from 78% to 82%, not indicative of any economic slowdown. As is always the case with China, it is risky to look at a single month’s data point as any sort of trend, and the continued rise in crude prices seem to reflect that sort of reaction by the market.
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