Oil prices fell more than 4% on Tuesday after China’s exports dropped for a sixth straight month, underscoring a slowdown in global demand.
West Texas Intermediate (CL=F) settled 4.3% lower at $77.37 per barrel. Brent (BZ=F) crude futures also tanked 4.19% to $81.61 per barrel.
The slide came amid data out of China which showed exports fell 6.4% year over year in October, while imports rose 3%. China is the world’s largest oil consumer.
Daily price moves of more than 2% in either direction have become a common occurrence since Hamas’ surprise attack on Israel last month, keeping oil futures volatile but in a downward trend over the past two weeks.
“The market continues to be more focused on demand destruction than escalating war tensions,” wrote Dennis Kissler, senior vice president at BOK Financial’s trading division.
Moscow and Saudi Arabia recently reiterated their unilateral voluntary curbs, which up until September had fueled a supply squeeze. However recent Bloomberg data shows exports coming out of Russia are at a four-month high.
“While the Saudi and Russian supply cuts are now penciled into year-end, there may be some cheating being noted,” said Kissler, noting Russian ship traffic points to crude export levels above what the Russian oil minister has been stating.
OPEC+, a group of major oil exporting countries, will hold its next meeting later this month. Saudi Arabia and Russia could decide to extend their unilateral curbs into next year. Those cuts are on top of the reductions from the rest of the oil cartel lasting through 2024.
On Tuesday the US dollar index (DX-Y) rose, also putting pressure on crude prices. Oil is denominated in dollars.