A flotilla of US oil is set to sail to China. The relative weakness of WTI has prompted a revival in Chinese buying of US barrels as China’s state-owned Sinopec and Petrochina have fixed at least 10 VLCC tankers for March-loading cargoes out of the US Gulf Coast.
Yet another build in U.S. crude inventories added to downward pressure on oil prices on Friday morning. The EIA’s report weighed particularly heavily on WTI, opening an arbitrage window into both Europe and Asia. The market reaction to another 7.6-million-barrel build was originally subdued by speculation of a further production cut from Russia and rumors of Chinese demand returning. Ultimately, inflation fears and continued inventory builds pushed oil prices lower, with ICE Brent trending around the $81 per barrel mark, OilPrice reports.
China re-buys stake in global oil trader.China’s state-backed fund CNIC Corp. has bought a 5% stake in Swiss-based energy trader Mercuria, assumed to be worth at least $220 million, only months after another Chinese company ChemChina sold back a 12% stake in the same company. Iraq to drop US dollar in China exports.The Iraqi central bank announced this week that it had allowed trade from China to be settled directly in yuan rather than US dollar, a relief for the country’s energy sector as since 2022 the US Treasury has enforced stricter controls on transactions by Iraqi banks.
It’s going to be a wild year. China sent ten supertankers to the U.S. Each with the capacity to transport a whopping 20 million barrels of oil. China’s also scooping up huge amounts of crude from Russia, Saudi Arabia, the UAE, and more. It’s a hint that Beijing might be expecting that long-awaited spike in demand…A spike that could eat away at inventories. In fact, that’s why Pioneer CEO Scott Sheffield is putting a$100 target on Brent Crude by the end of the year. But there are a lot of moving parts in this machine.China isn’t the only one influencing prices, after all, OilPrice said.