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Oil Edges Off Three-Year High as China Imports Slow

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01/12/2018 | 12:29 pm

By Sarah McFarlane

Oil prices slipped off a three-year high on Friday after China reported a fall in monthly crude imports.

Brent crude, the global oil benchmark, eased 0.2% to $69.13 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.5% at $63.48 a barrel.

Reports that China customs data showed a sharp fall in December crude oil imports from November prompted the market to edge lower, having breached $70 a barrel on Thursday.

The lower imports were to be expected, according to Richard Mallinson, analyst at consultancy Energy Aspects, as Chinese refiners worked through their inventories. "It still rounds off a really strong year," he said.

Mr. Mallinson said Chinese imports were up by about 800,000 barrels a day on average last year and forecast imports to grow by a further 400,000 to 500,000 barrels a day over 2018.

Brent has rallied over 50% since June last year, propelled by geopolitical tensions, supply disruptions and production cuts by the Organization of the Petroleum Exporting Countries. More recently it was boosted by extremely cold weather in the U.S. and China, along with protests in Iran, where the lifting of international sanctions two years ago hasn't provided the relief expected.

Market participants were awaiting a U.S. decision on whether to extend temporary waivers on sanctions against Iran due on Friday. People familiar with the matter have said President Donald Trump, who has criticized the deal in the past, has decided to extend the sanctions relief.

Analysts at Commerzbank said they didn't expect him to revoke it.

"If Trump were to unilaterally reimpose sanctions, the oil price would probably continue to climb, as this would also jeopardize Iranian exports again," the analysts said in a note.

Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.3% to $1.83 a gallon. ICE gasoil changed hands at $613.50 a metric ton, down $4.50 from the previous settlement.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

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