The first week of September continued on the course set by August, most of the market motion can be boiled down to the US-China trade conflict jeopardizing growth prospects across the world and US stocks decreasing providing a counteracting short-term relief for crude prices. Trade negotiations with China did not progress much in the past seven days, except for President Trump warning his Chinese counterparts that getting a deal after his (possible) 2020 re-election might be much more difficult than now. Analysts expect a 3 MMbbl drawdown in US crude inventories for the week ended August 30 – thus, despite a drop in prices on Friday-Monday, crude prices on Wednesday roughly the same as they were a week ago.
Global benchmark Dated Brent traded around $60 per barrel on Wednesday afternoon, whilst US benchmark WTI was assessed at $55.3-55.5 per barrel.
1. China Crude Imports Drop in August
- Chinese crude imports in August 2019 were palpably hit by the ramifications of Typhoon Lekima which constrained Shandong refinery operations mid-month.
- September imports will most probably bounce back from August’s 5-month low (7mbpd worth of crude already booked) as the 400kbpd Rongsheng Zhejiang refinery eats up bonded storage reserves.
- The Zhoushan-based private refiner has started up in July this year, yet has sourced its feed primarily from nearby storage so far.
- For the fourth month in a row, aggregate Asian crude imports…