SummaryChina’s crude imports from Saudi to remain depressedChina draws on record inventories amid high prices -dataChinese economy and US rate risk continue to weighMarkets worry about supply disruptions from Atlantic stormsHOUSTON, Aug 21 (Reuters) – Brent and U.S. crude oil finished on Monday at a loss, as hopes for Chinese demand faded”It seems that (China’s recovery) is not going to happen,” said John Kilduff, partner at Again Capital. “It’s doubtful they’re going to be buying. They bought a lot of crude for storage earlier in the year. They’re sitting on a lot of crude.”Brent crude settled down 34 cents at $84.46, a loss of 0.4%. U.S. West Texas Intermediate crude finished at $80.72 a barrel for a loss of 53 cents or 0.65%. Earlier in the session, both benchmarks had been up by as much as $1.”Right now, its a battle between Saudi production cuts versus demand destruction,” said Robert Yawger, director of energy futures, Mizuho Securities USA.Gains in crude prices through the summer were driven by the tight balance between crude oil supply and high demand, especially in the U.S. summer driving season, which ends the first of September, and from Latin America.At the same time, OPEC led by Saudi Arabia, plus Russia have cut production to better match demand, especially from China, which has yet to meet expectations for post-pandemic recovery.Saudi Arabia said this month its production would remain around 9 million barrels per day, a cut of about 1 million barrels, through the month of September.Last week, both front-month benchmark fell 2%, snapping a seven-week winning streak on concerns China’s sluggish economic growth will curb oil demand, while the possibility of further increases to U.S. interest rates also overshadows the demand outlook.China’s central bank trimmed its one-year lending rate by 10 basis points and left its five-year rate unmoved. That was a surprise to analysts who had expected cuts of 15 bps to both as recovery in the world’s second-largest economy has been slowed by a worsening property slump, weak spending and tumbling credit growth.Top exporter Saudi Arabia’s July shipments to China fell 31% from June while Russia, with its discounted crude, remained the Asian giant’s largest supplier, Chinese customs data showed.China’s crude oil imports from Saudi Arabia are expected to remain depressed through the third quarter, analysts said.China is drawing on record inventories amassed earlier this year as refiners scale back purchases after prices were driven above $80 a barrel by supply cuts implemented by the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia.”We still see a tight oil balance for the remainder of the year, which suggests that prices still have some room to run higher,” said Warren Patterson, ING’s head of commodities research, adding that the dollar was also providing support.A weaker dollar makes oil purchases less expensive for holders of other…
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