Oil falls ahead of EIA weekly report

Oil prices fell on Wednesday, to head for the second straight daily gain due to renewed concerns over the Chinese demand, after China's imports of oil declined, which overshadowed a large drop in the US crude inventories for the eighth consecutive week according to the American Petroleum Institute's preliminary data, ahead of the EIA's weekly report.

US crude fell 1.4% to $74.11 a barrel, after opening at $75.17, and hit a high at $75.31, and Brent crude fell 1.2% to $75.32 a barrel, after opening at $76.24, and hit a high of $76.54.

US crude gained 1.4% yesterday, and Brent crude rose 1.7%,  thanks to US demand hopes.

China's imports of crude oil fell 3% during the first half of 2021 compared to 2020, the first slowdown of this kind since 2013, as refinery maintenance, high global prices and an inventories glut curbed demand.

Eurasia Consulting Group said in a note that this drop in imports came as surging prices for crude oil have eroded refinery profit margins.

Eurasia said on the ongoing dispute inside OPEC+, that If OPEC doesn’t agree to raise supply soon, high oil prices will also likely lead to demand destruction in even more cost-sensitive emerging markets, especially India.

The American Petroleum Institute reported today in preliminary data that the US crude inventories fell 4.1 million barrels during the week ending July 9, while analysts forecast a drop by 4.9 million barrels.

The total US commercial inventories fell to 445.3 million barrels, which is the lowest level since the week ending February 21, 2020, in a positive sign of the US domestic demand.

The US Energy Information Administration's official data will be released later today, amid forecasts for inventories to drop by 4.3 million barrels.

While the US output rose 200,000 barrels per day last week, with the total at the highest level since May 2020 at 11.3 million barrels per day.