Singapore: Oil prices remained weak on Tuesday as the global economic outlook darkened further and cooperation between oil producing countries to curb oversupply looked unlikely. In China, Asia's biggest economy and the world's top consumer of energy and commodities, crude oil imports fell 13.4 percent in August to 26.59 million tonnes (6.29 million barrels per day) from the previous month, although underlying demand remains strong.
In the first eight months of 2015, China's crude imports were up 9.8 percent to 6.63 million bpd, indicating still-solid demand for gasoline as the growing middle class drive and fly more often. In Japan, the economy shrank an annualised 1.2 percent in April-June despite ongoing government and central bank measures to support growth.
US crude was at $44.31 per barrel at 0425 GMT, down $1.74 since Friday's close, weighed down by the closure of the largest crude distillation unit at Exxon Mobil Corp's 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery.
US markets were closed on Monday for a holiday. Brent futures, unaffected by the refinery closure, added 20 cents to $47.83 barrel, although the global benchmark was still down $1.44 from its opening value on Monday. "Brent will likely be range-bound and volatile over the next 12 months as the supply overhang is worked off," Morgan Stanley said, adding that it expected the glut to be worked off and result in higher prices by the fourth quarter of next year.
"In the interim, non-fundamental factors (FX, macro themes, fund flows, etc.) and headlines will likely remain key price drivers," the bank said. Oil prices have fallen almost 60 percent since June 2014 on a global supply glut, with prices seesawing in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.
On the supply side, recent speculation that Russia might be willing to cooperate with the Organization of the Petroleum Exporting Countries (OPEC) to curb output in support of prices was given a blow on Monday after the chief executive of Russian oil major Rosneft ruled out a Russian cut. Igor Sechin said that unlike the Middle East, where most oil companies are totally government-owned and controlled, Russia could not easily cut its output as its oil firms had strong foreign shareholders and the corporations were responsible to shareholders rather than the government.
OPEC is producing close to records to squeeze out competition, especially from U.S. shale drillers, which have so far weathered the price plunges to keep pumping
