Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Asian demand for imported oil is set to slow for a second straight month in July. trade flow data showed on Monday. as economic growth starts to stutter amid an escalating trade dispute with the United States.
Preliminary demand figures in Thomson Reuters Eikon. based on ordered tankers for July by major suppliers. show a sharp drop-off from June in a month that normally posts a small rise in cargoes.
Preliminary July orders are down 11 percent from June to 16.7 million barrels per day (bpd). taking the average for the three months from May to July to 19.3 million bpd.
While still high. that’s below an average of 20.2 million bpd during the same months last year and comparable to levels seen in 2016.
The figures come on the back of reports of a slowdown in manufacturing growth and export orders in Asia’s main economic hub around China. Japan and South Korea as trade tensions with the United States ratchet higher.
“It takes two to three months to have clear data that shows signs of weakening oil demand.“ said Lee Dal-sok. senior research fellow at state-funded think-tank Korea Energy Economic Institute.
“Given the trade disputes and rising oil prices (in most of 2018). data will show slowing oil demand and in the second half of this year.“ he added.
Of particular interest is China. Asia’s largest economy and the world’s biggest importer of crude oil.
Zhong Jian. chief analyst at energy consultancy JLC said “the ongoing trade war … tarnished market sentiment … (and) crimped the manufacturing sector. leading to slower growth in China’s oil products consumption“.
Lee of the Korea Energy Economic Institute said the “worsening U.S.-China trade dispute slows down global economic growth“. including in South Korea.
U.S. President Donald Trump has introduced numerous tariffs on imports. including from China and India. but also close political allies like South Korea. the European Union and Canada. and he has threatened to introduce more duties.
U.S. bank JP Morgan said the “recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy.“
A “medium-intensity“ trade conflict would likely reduce global economic growth by at least 0.5 percent. “before accounting for tighter financial conditions and sentiment shocks“ to markets.
In a further sign of the slowdown. four supertankers chartered by energy major BP have been held up or delayed off China’s east coast over the last two months. unable to fully discharge oil amid slowing demand from the country’s private refiners.
Brent crude futures LCOc1. the international benchmark for oil prices. also fell by more than 1 percent on Monday after recent strong gains on supply concerns.
“Investors have been rattled … as oil prices tumbled on trade protectionist rhetoric in global politics.“ said Benjamin Lu of brokerage Phillip Futures in Singapore.
