Oil price rout continues despite record Chinese imports
iNVEZZ.com, Tuesday, January 13: Crude oil futures have continued their march downward and reached fresh multi-year lows despite China reporting record crude imports last month. Meanwhile, according to Saudi Arabian prince Alwaleed bin Talal, crude prices will ‘never’ again reach a level of $100 per barrel, USA Today has reported.
Brent for February delivery had tumbled nearly $2, or 4.17 percent, to $45.45 per barrel as of 07:51 GMT on the London-based ICE Futures Europe exchange. The benchmark hit a fresh five-and-a-half year low of $45.23 per barrel in earlier trading despite record Chinese imports.
According to preliminary data from the Customs General Administration of China (CGAC) released today, the country imported 30.37 million metric tons of crude oil in December, equivalent to 7.2 million barrels a day. The figure was 13 percent higher than a year earlier, and topped a record high of 28.16 million tons of imported oil set last January. The Wall Street Journal cited Miao Tian, an analyst with investment bank North Square Blue Oak, as saying: “China’s reliance on imports of crude oil has already reached 60 percent of consumption, so with such low prices, it definitely reduces cost”.
According to a note from ANZ cited by Reuters: “A flurry of bearish forecasts by analysts have kept downward pressure on oil prices”. Yesterday, analysts at Goldman Sachs cut their average forecast for both Brent and WTI in 2015 to $50.40 and $47.15 down from $83.75 and $73.75 respectively.
February WTI futures had shed $1.55, or 3.36 percent, to $44.52 in electronic trading on the NYMEX in New York as of 07:51 GMT. The contract has fallen below the $45 per barrel mark for the first time since 2009. According to an interview with Fox Business News published in USA Today, Saudi prince Alwaleed bin Tala said that “we’re never going to see $100 anymore”. According to him “the price of oil above $100 is artificial […] It’s not correct.”
Based on the two front month contracts, Brent was trading at a premium of 93 cents to WTI as of 07:51 GMT. Yesterday the ratio settled at $1.36, the narrowest based on closing prices since July 2013.