• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 2 hours More dumbed down? re Hong Kong Act of Congress
  • 3 hours EU has already lost the Trump vs. EU Trade War
  • 6 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 8 hours Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 1 hour What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 2 hours U.S. Shale Output may Start Dropping Next Year
  • 9 hours U.S. Shale To Break Records Despite Bearish Rhetoric
  • 3 hours Petroleum Industry Domain Names
  • 1 hour Aramco IPO magic trick
  • 2 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 21 hours Impeachment S**te
  • 13 hours Visualizing Pennsylvania Oil & Gas Production (Through September 2019)
  • 2 hours China 2019 - Orwell was 35 years out
  • 7 hours Last I Checked
Alt Text

Endless Economic Wars: A Major Threat For U.S. Oil Exports

The recently imposed Chinese tariffs…

Alt Text

Venezuela Is Using Invisible Oil Tankers To Skirt Sanctions

Venezuela’s oil exports rebounded in…

Darrell Delamaide

Darrell Delamaide

Darrell Delamaide is a writer, editor and journalist with more than 30 years' experience. He is the author of three books and has written for…

More Info

Premium Content

Crude Oil Prices Fall Victim to China Syndrome

Oil Market roundup for 01/18/2010 – 01/22/2010.

New measures by Chinese authorities to curb bank lending reversed a rally in energy prices early in the week, bringing West Texas Intermediate futures down more than 4% in the second half of the week to below $75 a barrel by Friday.

China continued its efforts to slow down its economy and prevent overheating, and told some banks to stop making certain kinds of loans. The Chinese move on Wednesday hit all commodities across the board, from gold to lead, with the prospect of slower economic growth in the country.

Not even the news that China’s oil imports in December exceeded 5 million barrels of oil a day for the first time could stop the decline.

U.S. data, meanwhile, showed that demand for oil had slipped 1.8% in the four weeks leading to Jan. 15 from the like period a year ago, when the U.S. economy was in the grip of a recession. Crude inventories declined in the week, against expectations, but gasoline inventories rose. Continued milder weather in the Northeast further dampened heating oil prices.

News that utilization of U.S. refinery capacity fell to its lowest levels since the 1980s drove home the point that demand for distillates was lagging. Refinery utilization in the previous week dropped 2.9 percentage points to 78.4% of the 17.6 million barrels per day total capacity, the lowest level in two decades except for periods when hurricanes shut down refinery operations.

The U.S. and China are the world’s top two oil-consuming countries, so the signs of weakening demand in both were bearish for energy prices.

As if all that wasn’t enough, the announcement by the White House on Thursday of tough new measures to limit banks’ proprietary trading threw a double whammy in energy markets. There were concerns that Wall Street banks, among the biggest energy traders, would have to cut back their activities. Plus, the news sent equities into a tailspin, and dragged down commodities prices.

The uncertainty about U.S. bank restructuring reversed the dollar’s climb against the euro, which had also weighed on crude oil prices. After dropping below $1.41, the euro bounced back up above that level at the end of the week.

But continuing concerns about Greece’s debt and new uncertainty about whether Ben Bernanke will be confirmed for a second term as Federal Reserve chairman supported the dollar and were likely to dampen any strong rise for the euro, analysts said.

By Darrell Delamaide for 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
Download on the App Store Get it on Google Play