X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 2 hours U.S. Presidential Elections Status - Electoral Votes
  • 8 hours Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 1 day Interest article about windmills and waterwheels in Europe
  • 10 hours Retired RAF pilot wins legal challenge over a wind farm
  • 2 days “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 2 days Chance for (Saudi)Arabian peninsula having giant onshore Gas too?
Jet Fuel Demand Is The Only Thing Holding Oil Back

Jet Fuel Demand Is The Only Thing Holding Oil Back

Oil prices have rallied past…

U.S. Oil Production Fell To 11 Million Bpd In December

U.S. Oil Production Fell To 11 Million Bpd In December

U.S. crude oil production fell…

Russian Oil Giant Rosneft Sees Profits Slide 79% In 2020

Russian Oil Giant Rosneft Sees Profits Slide 79% In 2020

Rosneft reported a 79-percent drop…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

China Willing To Pay More For Crude As Trade War Bites

China’s imposition of tariffs on U.S. crude oil signals its willingness to suffer more pain in the trade war than analysts may have expected. That’s according to a Bank of America analyst who spoke to CNBC.

“They’re hurting themselves on the domestic front by making it more difficult for domestic refineries to make money. They’re hurting themselves on the international front by making their refineries less competitive,” said BofA’s head of commodities and derivatives research, Francisco Blanch.

Blanch's remarks refer to wide expectations for greater demand for light sweet crude, which is the primary sort of crude the United States produces and exports. These expectations are related to the new sulphur emissions rules the International maritime Organization will put into effect from next January.

According to Blanch, the new IMO rules will “create a pretty big premium on light sweet grades which are mostly coming out of the U.S. these days.” 

A quick check with actual figures, however, reveals that the United States is not even in the top five suppliers to China. As of end-2018, Russia was the largest one, followed by Saudi Arabia—which this year has overtaken Russia as number one—Angola, Iraq, and Oman. The situation has changed this year, and not for the better for U.S. producers: Chinese buyers have been keeping their intake of U.S. oil to a minimum as the trade war continues.

Indeed, Blanch acknowledges that China is not a huge buyer of U.S. crude right now, with the average for the first half of the year at 120,000 bpd, most of which shipped during the first quarter, before the trade talks situation deteriorated.

He offered a parallel with soy beans: because of the tariffs, China switched from U.S. to Brazilian—and also Russian—soy beans, with the Brazilian commodity more expensive than the U.S. equivalent.

“We are skeptical that this is going to get resolved,” the analyst said. “And part of it is that China’s pain threshold is high.”

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News