(Reuters) A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. Oil prices dipped on Friday, ending a two-day rally, as a glut of crude and refined products weighed on markets and investors eyed a possible stutter in China’s imports.
U.S. West Texas Intermediate (WTI) crude futures CLc1 fetched $41.74 per barrel at 0930 GMT (0530 ET), down 19 cents from their last close, after trading as low as $41.44 earlier in the day. They were on track roughly to break even on the week.
International Brent crude futures LCOc1 were trading at $44.07 per barrel, down 22 cents on the day but set for a weekly gain of around 3.5 percent.
Downward pressure returned as overproduction in crude and refined products has left onshore storage tanks brimming and triggered the chartering of tankers to store unsold fuel.
There are also growing worries that China’s imports are weakening from records set in 2015 and this year.
“Signs of fatigue are already apparent and include a notable dip in Chinese crude oil imports,” PVM’s Stephen Brennock wrote, adding that spare capacity in the country’s strategic storage space is less than 100 million barrels.
“A major pillar of oil demand is therefore on course to ease considerably over the coming months,” Brennock said.
Still, China surpassed South Korea as the top Asian buyer of North Sea Forties crude this year, while trading house Trafigura was aggressively targeting China’s newest buyers by extending credit to two of the country’s independent refiners.