Signs of a dip in Chinese oil demand and rising US crude production have pulled down oil prices.
The fall in prices comes despite Venezuela’s export constraints and the ongoing supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).
Brent crude futures LCOc1 dropped by 53 cents, or 0.7%, to touch $76.79 per barrel, while US West Texas Intermediate (WTI) crude futures CLc1 decreased by 38 cents, or 0.6%, to trade at $65.57, according to Reuters.
For the month of May, Chinese crude oil imports fell after hitting a record high in the preceding month, as indicated by data released by the General Administration of Customs on 8 June.
As per the data, May shipments slipped to 9.2 million barrels per day from 9.6 million barrels per day in April.
The drop in imports is attributed to a planned maintenance at state-run refineries.
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Adding to the pressure on oil prices is the soaring US production C-OUT-T-EIA, which reached 10.8 million barrels per day last week.
Since mid-2016, the US output has grown at an average rate of 2.3% per month.
The production is inching closer to the 11 million barrels per day produced by Russia.
As a result, US WTI crude’s discount to Brent CL-LCO1=R increased to more than $11 per barrel.
Australia’s Rivkin Securities investment analyst William O’Loughlin was quoted by the news agency as saying: “This is occurring because of the rapid increase in production from US shale coupled with the tightening of supplies elsewhere through the actions of OPEC and Russia.”
Despite the fall in the international benchmark, markets continue to remain tight due to supply trouble in Venezuela.
US investment bank Jefferies said: “Crude market is tight and spare capacity could dwindle to 2% of demand in 2H18, its lowest level since at least 1984.”