China continues to import large quantities of crude Oil - Commerzbank

Oil prices recovered somewhat at the start of the week from Friday's slump as the US signaled its willingness to negotiate following its latest tariff threat against China, Commerzbank's commodity analyst Carsten Fritsch notes.

China stabilizes the Oil market

"Additional support came from data on China's crude Oil imports published by the customs authority on Monday morning. These remained robust in September, amounting to 47.25 million tons or 11.5 million barrels per day. This was 3.9% more than in the previous year. The 4.5% decline compared to the previous month can largely be explained by the calendar day effect."

"On a daily basis, imports were only slightly lower than in August. Data provider Kpler additionally points to tight import quotas, which meant that independent refineries were only able to import limited quantities of Oil from Russia and Iran. In the first nine months of the year, Chinese crude Oil imports exceeded the level in the same period last year by 2.6%."

"The fact that imports are set to rise this year is primarily due to reserve purchases. These are likely to have helped absorb the increasing supply on the Oil market. The oversupply is likely to increase in the coming months. It is therefore crucial for the stability of the Oil market that reserve purchases continue in the coming months."