Oil prices dipped after Brent hit $70 a barrel

Oil prices declined after Brent reached $70 a barrel as data unveiled an intensifying economic recovery in China, which was offset by fears of inflation.

Brent crude futures for May declined by 34 cents and settled at $68.88 per barrel. Meanwhile, U.S. West Texas Intermediate crude for April dropped by 0.34% to $65.39 per barrel.

A massive U.S. stimulus package passed in March, boosting prospects for global economic growth but also inflation.

However, analysts claim a pact by top producers to rein in output and recovery to demand due to vaccine roll-outs will keep lifting prices despite any temporary setbacks.

Significantly, China’s industrial output growth accelerated in January-February, beating expectations. Meanwhile, its daily refinery throughput data boosted by 15% from the same period a year earlier.

Bjarne Schieldrop is a SEB chief commodity analyst. According to him, there is increasing confidence that global oil remand is recovering as the U.S. coronavirus death toll falls. Meanwhile, China’s apparent oil demand recovered.

The U.S. overtook Saudi Arabia as India’s second-biggest oil supplier

The U.S. overtook Saudi Arabia as India’s second-largest oil supplier after Iraq last month, as refiners raised cheaper U.S. crude purchases to record levels in order to offset OPEC+ supply cuts.

Additionally, the switch in supplies, triggered by lower U.S. crude demand, coincided with Saudi Arabia’s voluntary another 1 million barrel per day output cut, on top of an agreement by the Organization of the Petroleum Exporting Countries and its allies to keep lower production.

India’s imports from the United States increased 48% to a record 545,300 BPD in February from the previous month. This accounts for 14% of India’s overall imports last month.

Furthermore, February imports from Saudi Arabia declined by 42% from January to a decade low of 445,200 BPD. Saudi Arabia, which has always been one of India’s top two suppliers, slid to No. 4 for the first time since January 2006.