Oil prices experienced a sharp decline of around 3% on Tuesday following China’s sixth consecutive month of declining exports, highlighting a global reduction in demand.
China, the world’s largest oil consumer, observed a 6.4% decline in year-over-year exports, contrasting with a 3% increase in imports.
In morning trading, West Texas Intermediate (CL=F) and Brent (BZ=F) crude futures were at approximately $79 and $83 per barrel, respectively.
Price fluctuations exceeding 2% have become a frequent occurrence since the surprise attack on Israel by Hamas last month, resulting in volatile oil futures trending downward over the past two weeks.
“The market continues to be more focused on demand destruction than escalating war tensions,” expressed Dennis Kissler, senior vice president at BOK Financial’s trading division.
Despite voluntary curbs from Moscow and Saudi Arabia, oil supply continues to be a concern, with Bloomberg data showing Russian exports at a 4-month high.
“While the Saudi and Russian supply cuts are now penciled into year-end, there may be some cheating being noted,” noted Kissler, calling attention to Russian ship traffic indicating crude export levels higher than what the Russian oil minister has been reporting.
OPEC+ is scheduled to convene later this month with the potential for Saudi Arabia and Russia to extend their unilateral curbs into the following year, alongside reductions from the rest of the oil cartel extending through 2024.
Additionally, on Tuesday, the US dollar index (DX-Y) saw an increase, further impacting crude prices as oil is denominated in dollars.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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