WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange nearest delivered oil futures and Brent crude on the Intercontinental Exchange declined in early Monday trade after an unexpected drop in customs data from China fueled investors' concerns over slowdown in global fuel demand.
Nymex February West Texas Intermediate futures fell $0.14 to trade at $51.45 barrel (bbl) and ICE March Brent registered $0.22 loss to $60.26 bbl.
Nymex February ULSD futures advanced higher to $1.8970 gallon on the colder weather in North East United States, as February RBOB futures declined 0.58 cents to a $1.3949 gallon.
The government report released overnight showed China's exports fell 4.4% in December, while imports dropped by 7.6% versus estimates for an 8.0% annualized increase, fueling concern over the structural weakness in the world's second largest economy. Despite the concerns, Reuters estimated that China's crude imports surged by 30% in December, showing little sign of the slowdown in China's fuel demand.
In physical markets, Saudi Arabia Energy Minister Khalid al- Falih said Sunday during an interview that production cuts of 1.2 million barrels per day (bpd) by the Organization of Petroleum Exporting Countries, Russia and nine non-OPEC producing nations would balance the market in 2019. He emphasized that the market is "on the right track," while adding that there is no need for an extraordinary OPEC meeting before its next scheduled gathering in April. During the same interview, Khalid al- Falih offered a rare criticism of the slow pace in production cuts from Russia that is gradually lowering its output to meet the target of 230,000 bpd in the current quarter. Currently, Russia has reduced its output by just 30,000 bpd, while the original pledge in Vienna was the cuts of 50,000-60,000 bpd for the first month of the year.
Russian oil production hit the record high of 11.45 million bpd in December, right before the country agreed to the latest OPEC deal to curb the output. In order to comply with the agreement, Russia will need to cut almost 2% from October level to reach 11,191 million bpd by the end of March.
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