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Oversupply Adds To Grim Oil Demand Outlook

Oversupply Adds To Grim Oil Demand Outlook

The oil demand recovery is…

Oil Rises After EIA Confirms Crude Inventory Draw

Oil Rises After EIA Confirms Crude Inventory Draw

Oil prices continued to rally…

PetroChina Declares Force Majeure On Gas Imports

PetroChina, the largest importer of natural gas, has declared a force majeure on all imports, including of liquefied natural gas, unnamed sources told Reuters, without providing any details except that the move was prompted by the coronavirus outbreak.

“The supply cuts will fall on suppliers proportionately but LNG suppliers will have a lesser impact versus those on piped gas”, one of the sources said.

China imports 40 percent of the natural gas it consumes, with 70 percent coming via pipelines from Russia, Kazakhstan, other Central Asian states, and Myanmar. The rest comes in the form of LNG from other parts of the world.

As forb pipeline gas, one of the Reuters sources said that PetroChina has asked for cuts in daily volumes. As for LNG, according to one source, the state company had asked for a deferral of several cargoes to the third quarter.

The move comes after another state energy company, CNOOC, suspended its contracts with at least three LNG suppliers, Reuters recalls. CNOOC is China’s largest importer of liquefied gas.

The news suggests that natural gas storage space in China is full while demand remains subdued and likely to stay that way for an as of yet undetermined period of time. Reports about the economic activity in the world’s largest manufacturing and exporting nation have been bleak, with expectations now about not just a slowdown in growth but an actual GDP contraction for the first quarter.

“PetroChina has done its best over the past month mitigating the virus impact and tried not to issue such a notice, including diverting cargoes to India and Singapore,” one of the Reuters sources said. “But unlike CNOOC (which sent the notice earlier) which may see demand slowing recovering, PetroChina is grappling with a sharp seasonal demand fall from mid-March (for piped gas) when the heating season ends.”

By Irina Slav for Oilprice.com

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