Oil imports into the world's biggest energy market have held below 10 million barrels per day for the past four months, with official trade data showing a 9.71 million tally for the month of July.
The drop comes amid a rise in coronavirus infection rates around the country, which has now spread to 12 different cities, and rising Delta-variant infection rates around the broader Asia region.
Last week's surprise increase in domestic U.S. crude stocks, a firmer U.S. dollar and pending reports from OPEC, the International Energy Agency and the Energy Department later this week, all of which are expected to forecast modestly weaker second-half demand, have added to downward pressure on oil prices.
Cumulatively, crude oil imports have dropped 5.6% over the first seven months of 2021," said ING's senior commodities strategist Wenyu Yao. "High oil prices, limited import quotas especially for private refiners, and refinery maintenance have been weighing on crude oil demand from the country."
"Disruptions to port operations on the east coast due to typhoon In-Fa at the end of July, also appear to have weighed on crude oil imports for the month," she added.
WTI crude futures for September delivery, which fell more than 7% last week, were marked $1.80 lower in early New York trading to change hands at $66.46 per barrel.
Brent crude contracts for October, the benchmark for global prices, fell $1.88 to $68.82 per barrel on "n growing concerns over the Delta variant of the virus and the impact this could have on the oil demand recovery, particularly at a time when OPEC+ prepares to raise oil output gradually," noted Yao.
Occidental Petroleum (OXY) - Get Free Report, meanwhile, was marked 2.24% lower at $25.80 each, which the decline sharpened by Securities and Exchange Commission filings showing activist investor Carl Icahn had trimmed his holding in the oil major to 6.94% from 8.2%.