One of the key bullish factors for oil has been the higher demand from China. China has surpassed the United States to become world’s largest importer of crude oil as increasing shale oil output in the United States reduced import demand of oil. However, calculations made by Reuters using initial customs statistics, suggest that oil imports in July declined to the lowest level in seven months, though on a yearly basis imports were up by 12 percent. In May, oil import was 15 percent higher than a year ago. Crude oil imports in the first seven months of this year increased by 13.6 percent to 247 million tons. However, according to Reuters, China imported around 34.66 million tons of crude oil in July or 8.16 million barrels per day, which is the lowest since January this year. In H1, crude imports have averaged 8.55 million barrels per day.

At this point, it is not clear whether the decline is due to a slowdown in demand or is it a one-off seasonal event. WTI is currently trading at $49.9 per barrel and Brent is at $3.3 per barrel premium to WTI.