### Summary
Oil prices rose in Asian trade, unfazed by China's disappointing interest rate cut, as the prospect of tighter supplies supported the outlook.
### Facts
- 💰 Oil prices rose in Asian trade, shrugging off China's interest rate cut.
- 🛢️ Concerns over slowing demand in China and rising US interest rates had driven steep losses in crude prices.
- 📉 China cut its one-year loan prime rate by 10 basis points to 3.45%, disappointing market forecasts for a larger cut.
- 🏢 Lack of changes in the mortgage rate raised concerns over a worsening real estate crisis in China.
- 🌍 Deep production cuts from Saudi Arabia and Russia are expected to limit crude supplies by nearly 70 million barrels over 45 days.
- 🇺🇸 Robust fuel consumption in the US, particularly during the summer season, pointed to tighter markets.
- 📈 Analysts expect oil prices to remain relatively higher for the rest of the year, despite the prospect of higher interest rates affecting US demand.
China's imports of thermal coal are expected to increase in August as seaborne prices remain competitive and domestic supplies are constrained, with robust demand for imported coal driven by increased thermal power generation and declining hydropower generation.
The American Petroleum Institute (API) has reported a significant draw of 11.486 million barrels in U.S. crude inventories, leading to rising oil prices as the market compares China's economic activity with U.S. crude inventories.
Oil prices eased as China's manufacturing activity contracted for the fifth consecutive month, raising concerns about the weak expansion in the world's second-largest economy, while investors await the release of the US personal consumption expenditure report.
U.S. commercial crude oil inventories have fallen by 34 million barrels since mid-July, tightening the market and causing spot prices and spreads to rise.
Oil prices jumped over 2.5% after OPEC+ members extended supply reductions, with Brent International topping $90 per barrel and West Texas Intermediate hovering above $87 per barrel, as Saudi Arabia announced an extension of its production cut and Russia reduced its exports. Despite slow recovery and increased production, crude futures have rallied more than 25% since late June, with experts predicting prices to continue rising unless a recession occurs. China's demand for petrochemicals has been dampened, but their mobility demand post-lockdowns has offset this.
The price of crude oil may reach triple digits by the end of next year, potentially impacting Americans' voting decisions, as global demand for oil is projected to reach a record high of 102 million barrels per day, according to the International Energy Agency and Goldman Sachs analysts.
Crude oil prices in the US increased due to a 6.3 million barrel inventory draw, following a massive decline of 10.6 million barrels the previous week, bringing inventories to the lowest in eight months.
Oil is on track for a third consecutive weekly gain, surpassing $90 per barrel for the first time in 10 months, driven by positive data from China and anticipation of the Federal Reserve's decision on inflation in the US.
China's diesel exports surged in August, nearly tripling compared to the same time last year, as refiners capitalize on strong refining margins and increased demand for gasoline and jet fuel, driven by a recovery in road traffic and domestic flight capacity.
China's natural gas demand is expected to grow by 8% this year, higher than analysts' forecasts, due to recovering industrial demand and lower global prices, with LNG imports and piped gas imports also projected to increase by 10.9% and 10.7% respectively in 2023.
Asia's crude oil imports declined in September for the second consecutive month due to refinery maintenance and the impact of higher prices, with imports in August and September marking the lowest two months in 2023; the decrease in imports may be the initial response to the surge in oil prices, and higher prices may continue to lead to lower imports in the fourth quarter.
China's decreased oil demand, coupled with its shift from crude imports to refined product exports and sizable oil inventories, is countering recent crude price surges and playing a significant role in the global oil market.
The American Petroleum Institute (API) reported a large inventory build of 12.94 million barrels in U.S. crude inventories, exceeding analysts' expectations of a smaller build of 1.3 million barrels.
China's imports of major commodities, including crude oil, natural gas, coal, and iron ore, remained resilient in September, showing strong growth compared to the same period last year, defying the market narrative that the country's economy is struggling for momentum.
Crude oil inventories in the United States fell by 4.383 million barrels for the week ending October 13, countering the previous week's large rise, according to API data.
