Brent crude fell below $85 per barrel on Tuesday as poor import/export data from China weighs on oil markets, OilPrice reported.

China has become the most important bearish factor weighing on oil prices recently, with July export-import data showing the Asian country’s economy is struggling to outgrow its post-COVID woes. 

Overseas exports of Chinese goods have recorded the worst month-on-month decline since February 2020 last month, down 14.5% in dollar terms, with weak consumer spending and investment growth aggravating the outlook. 

China’s crude imports have followed suit and decreased by 19% month-on-month to 10.3 million b/d, the lowest daily rate since January even though onshore crude inventories have continued to climb. 

The Chinese Central Bank set the yuan at the weakest level in almost a month today, seeking to stimulate further exports by means of a slightly devalued currency, however with demand slowing in the US, too, such measures might not be enough. 

Storm clouds are gathering over the oil markets, with weaker-than-expected Chinese macroeconomic data disappointing again and most probably putting an end to six consecutive weeks of Brent/WTI price gains. The bullish effect of Saudi Arabia’s production cut extension and Russia’s export curbs in September has evaporated, though disruptions in US refinery operations might boost product cracks further and help recoup some of the lost pricing territory as ICE Brent is back at $84 per barrel.