Tom Kirkman

There was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either

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Despite the trade deal between Washington and Beijing signed on January 15th, with China promising to significantly ramp up purchases of U.S. Energy...

"there was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either."

China Flu ---> China reneges.

 

Coronavirus havoc is drowning out China's failure to buy U.S. crude, LNG, coal: Russell

(Reuters) - Lost among the havoc being wreaked on crude oil markets by the new coronavirus crushing the world economy is the complete and utter failure so far of the deal for China to massively increase imports of U.S. energy.

It may be tempting to think that the collapse in U.S. crude prices will be enough to bolster the trade, which has only spluttered since Washington and Beijing signed a deal aimed at helping efforts to balance trade between the two.

The historic plunge of the front-month West Texas Intermediate (WTI) futures contract into negative territory on Monday was something of a technical issue related to the lack of available storage for May delivery, but it does underscore that the market is awash with crude.

A more realistic price for U.S. light crude is the WTI Houston physical price, as assessed by commodity price reporting agency Argus.

WTI Houston was at $21.57 a barrel on Monday, less than a third of its peak so far in 2020 of $66.65 in early January, but also well above the negative $37.63 the front-month WTI futures contract finished at on Monday.

If, for instance, the WTI Houston price is assumed to be representative of the price a Chinese refiner would pay for spot cargo, the question becomes why aren’t buyers flocking to the grade?

The deal between Washington and Beijing, signed on Jan. 15, called for a huge increase in China’s imports of U.S. energy, amounting to an additional $52.4 billion over 2020 and 2021 over a baseline of $9.1 billion in 2017.

Most of the increase would have fallen on crude, although China was also expected to bulk up on imports of U.S. coal and liquefied natural gas (LNG).

However, since the deal was signed, China’s imports of U.S. energy have barely ticked higher, and while it may be tempting to blame the coronavirus outbreak, that’s clearly not the case.

Given the lag between buying a cargo of crude and delivering it from the U.S. Gulf to China, it would have been unreasonable to expect much of an uptick in imports of U.S. energy before April.

Indeed, there was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either.

For May, only three tankers, carrying a mere 4.63 million barrels, were expected to arrive before the end of the month, according to vessel-tracking and port data compiled by Refinitiv.

For June, it’s even more dismal, with only one cargo currently under negotiation, although it’s possible that more vessels can be arranged with a May departure date and a June arrival.  ...

 

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< And totally unrelated... >

< please note my sarcasm font above >

Trump says China wants him to lose his bid for re-election

(Reuters) - President Donald Trump said on Wednesday he believes China’s handling of the coronavirus is proof that Beijing “will do anything they can” to make him lose his re-election bid in November.

In an interview with Reuters in the Oval Office, Trump talked tough on China and said he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.  ...

 

... “China will do anything they can to have me lose this race,” said Trump. He said he believes Beijing wants his Democratic opponent, Joe Biden, to win the race to ease the pressure Trump has placed on China over trade and other issues.

“They’re constantly using public relations to try to make it like they’re innocent parties,” he said of Chinese officials.

He said the trade deal that he concluded with Chinese President Xi Jinping aimed at reducing chronic U.S. trade deficits with China had been “upset very badly” by the economic fallout from the virus.  ...

 

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43 minutes ago, Dan Warnick said:

Well, that's a surprise.

Well, not really a surprise as Trump is only Prez to put the hammer down and and try to erase the un-equal trade with China. I bet there are a lot of folks kicking themselves in the ass for getting greedy and now is the time to pressure them more. Pharms need to be brought back to this country. They control all the major meds we need. US needs re-think their policies with China. They're trying like hell to be no.1 Superpower.

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52 minutes ago, Old-Ruffneck said:

Well, not really a surprise as Trump is only Prez to put the hammer down and and try to erase the un-equal trade with China. I bet there are a lot of folks kicking themselves in the ass for getting greedy and now is the time to pressure them more. Pharms need to be brought back to this country. They control all the major meds we need. US needs re-think their policies with China. They're trying like hell to be no.1 Superpower.

My apologies.  I should never underestimate whether I need to add the (sarcasm) note.

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58 minutes ago, Dan Warnick said:

My apologies.  I should never underestimate whether I need to add the (sarcasm) note.

sarchasm.jpg.e9d381979e2565b346d135330746f69d.jpg

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(edited)

5 hours ago, Tom Kirkman said:

Despite the trade deal between Washington and Beijing signed on January 15th, with China promising to significantly ramp up purchases of U.S. Energy...

"there was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either."

 

Tom, there is no longer any trade deal between United States and China.

It was actually breached by the United States on the 28th April 2020.

United States effectively imposed an export ban on all Chinese companies on all US products more complicated than soybeans or crude oil. (Chinese companies would need export licences on anything American: this means they could be left without US imports at any moment). It would be detrimental for any Chinese company or company operating in China or company co-operating with China to import any products or services from the United States.

This is the historical moment, it is like Huawei sanctions but multiplied 30 times.

And soybeans and crude oil are available from many other world countries.

You probably have not noticed this: no problem. Among CIVID-19 many important actions are left unnoticed.

From 28th April 2020 on China would try to put all the might of its country to stop ANY imports from the United States.

Later this year probably one week  after the Presidential election ALL US companies would need to stop activities on the territory of China unless these moves are reversed, which is not possible.

I hope Apple would switch all their production to any other country till November 2020.

I was not writing about this cause it does not make any difference, the decoupling of US was finished, all the lawyers and CEOs of all multinationals are now bracing for the impact, cause they know that China would do nothing to strike back before November election: Trump needs this counter attack to win Presidency. So everybody has 6 months to do anything, later the hell would breake loose.

Please consider the links below:

https://www.news18.com/news/world/us-imposes-new-rules-on-exports-to-china-to-keep-tech-from-beijings-military-amid-covid-19-crisis-2595213.html

https://www.politico.com/newsletters/morning-trade/2020/04/28/a-potential-game-changer-for-china-export-controls-787183

 

Edited by Marcin2
typo
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I was skeptical about possibilty of shooting war, that means nuclear war between US and China this year.

But the only next action in US arsenal after 28th April export embargo is just attacking Chinese forces in South China Sea or imposing crude oil embargo that means navy blockage of China, which is the same thing cause it would mean nuclear war.

Many of you do not understand this but we are closer to nuclear war than we were ever during Cold War, even during Cuban missile crisis.

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It seems more likely China want's a bloodless war in which President Trump will lose the election and the communist/ liberal/ democrat Biden will win and be willing to kiss the asses of anyone who appears to agree with him. If Joe Biden were to become our President, this country will more than likely have another revolutionary war at which time all of Americas enemies will join forces against us and all of our so called allies will sit back and watch. China doesn't need to go nuclear, all they have to do is wait. 

America needs to keep her borders closed indefinitely and deport anyone who refuses to assimilate into our society and live by our laws, instead of trying to force us to accept theirs.

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13 hours ago, Marcin2 said:

I was skeptical about possibilty of shooting war, that means nuclear war between US and China this year.

But the only next action in US arsenal after 28th April export embargo is just attacking Chinese forces in South China Sea or imposing crude oil embargo that means navy blockage of China, which is the same thing cause it would mean nuclear war.

Many of you do not understand this but we are closer to nuclear war than we were ever during Cold War, even during Cuban missile crisis.

China will not initiate nuclear war. It is not in a MAD position. It can be destroyed, but it can not reciprocate in scale. 

It would take a colossal blunder to force the CCP into that kind of corner. 

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14 hours ago, Marcin2 said:

Tom, there is no longer any trade deal between United States and China.

It was actually breached by the United States on the 28th April 2020.

United States effectively imposed an export ban on all Chinese companies on all US products more complicated than soybeans or crude oil. (Chinese companies would need export licences on anything American: this means they could be left without US imports at any moment). It would be detrimental for any Chinese company or company operating in China or company co-operating with China to import any products or services from the United States.

This is the historical moment, it is like Huawei sanctions but multiplied 30 times.

And soybeans and crude oil are available from many other world countries.

You probably have not noticed this: no problem. Among CIVID-19 many important actions are left unnoticed.

From 28th April 2020 on China would try to put all the might of its country to stop ANY imports from the United States.

Later this year probably one week  after the Presidential election ALL US companies would need to stop activities on the territory of China unless these moves are reversed, which is not possible.

I hope Apple would switch all their production to any other country till November 2020.

I was not writing about this cause it does not make any difference, the decoupling of US was finished, all the lawyers and CEOs of all multinationals are now bracing for the impact, cause they know that China would do nothing to strike back before November election: Trump needs this counter attack to win Presidency. So everybody has 6 months to do anything, later the hell would breake loose.

Please consider the links below:

https://www.news18.com/news/world/us-imposes-new-rules-on-exports-to-china-to-keep-tech-from-beijings-military-amid-covid-19-crisis-2595213.html

https://www.politico.com/newsletters/morning-trade/2020/04/28/a-potential-game-changer-for-china-export-controls-787183

 

This is implementation of items that have been stated before. These are license requirements, not necessarily bans. So far, much of what was already included under these licensing arrangements was getting through, that is why the ZTE ban turned out to be such a surprise. 

Trump pretty much said that technological decoupling from China is on the books. Which I am going to presume is why China isn't keeping any of its obligations since these tightenings were initially announced late last year. 

I think the eventual target is big US assemblers in China including Apple, though they don't appear to have a relationship with the PLA. As the goal is to prevent a particular high level performance components of many kinds from showing up within China in quantity. 

It will hurt the global semiconductor industry, but nobody should have expected otherwise. US semiconductor makers would not be hurt alone. The world's associated chipsets will also be hurt. It will take time to see how much European cooperation will be had in this. I think that they expect a rationalized supply chain to force cessation of some trade with China and rebuilding of local or non-China SE Asian alternative supplies regardless of their stance on this issue.Germans and Dutch(?) and Japan have already banned robotics exports and technology transfers and buyouts of companies. . . 

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15 hours ago, Marcin2 said:

I was skeptical about possibilty of shooting war, that means nuclear war between US and China this year.

But the only next action in US arsenal after 28th April export embargo is just attacking Chinese forces in South China Sea or imposing crude oil embargo that means navy blockage of China, which is the same thing cause it would mean nuclear war.

Many of you do not understand this but we are closer to nuclear war than we were ever during Cold War, even during Cuban missile crisis.

Preach on Marcin, nobody is listening to you any longer.

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The best long-term business decision for Apple or Samsung or any other multinatiomal is to:

- lose all Chinese clients

or 

- stop using US technology.

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10 minutes ago, Douglas Buckland said:

Preach on Marcin, nobody is listening to you any longer.

This not my opinion but group of scientists, Please consider Doomsday Clock.

Also both Russia and United States do not have No First USE policies.

Any conventional war with Russia and China would go immediately nuclear.

As a Trump supporter you have a narrow view of the world, for Europeans you are just lunatics in Trump asylum.

All was Well before Covid-19 cause we knew it would be pretty easy for Trump to win re-election.

Now with deep recession and Covid-19 casualties it would be bery difficult even with Democratic weak candidate.

Next 6 months would be very dangerous times, cause Trump would even destroy US to become President.

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21 hours ago, Tom Kirkman said:

< And totally unrelated... >

< please note my sarcasm font above >

Trump says China wants him to lose his bid for re-election

(Reuters) - President Donald Trump said on Wednesday he believes China’s handling of the coronavirus is proof that Beijing “will do anything they can” to make him lose his re-election bid in November.

In an interview with Reuters in the Oval Office, Trump talked tough on China and said he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.  ...

 

... “China will do anything they can to have me lose this race,” said Trump. He said he believes Beijing wants his Democratic opponent, Joe Biden, to win the race to ease the pressure Trump has placed on China over trade and other issues.

“They’re constantly using public relations to try to make it like they’re innocent parties,” he said of Chinese officials.

He said the trade deal that he concluded with Chinese President Xi Jinping aimed at reducing chronic U.S. trade deficits with China had been “upset very badly” by the economic fallout from the virus.  ...

 

Trump needs to call mamiii to take cafe of him

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Who else is left wondering these days that the best chance the republicans might have had of winning the next election is if they had of allowed Trump to be impeached and gotten rid of him and now had someone else to run for president?

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2 hours ago, RSD said:

Who else is left wondering these days that the best chance the republicans might have had of winning the next election is if they had of allowed Trump to be impeached and gotten rid of him and now had someone else to run for president?

Apparently many of you fail to realize is that most likely the people that voted for Trump didn’t actually vote for the man. They just can’t fathom a world where they could actually cast a vote for the current Democratic Party. 
 

My family for generations voted hardline Democrat. No exception. But I seriously doubt that my father or grandfather would vote Democratic today.

 I can honestly state that my wife, my grown kids and I will vote against anything that the current Democrats run for office.
 

We won’t be voting for Trump. We will be voting against the lunacy of the left.

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On 4/30/2020 at 5:43 AM, Tom Kirkman said:

Despite the trade deal between Washington and Beijing signed on January 15th, with China promising to significantly ramp up purchases of U.S. Energy...

"there was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either."

China Flu ---> China reneges.

 

Coronavirus havoc is drowning out China's failure to buy U.S. crude, LNG, coal: Russell

(Reuters) - Lost among the havoc being wreaked on crude oil markets by the new coronavirus crushing the world economy is the complete and utter failure so far of the deal for China to massively increase imports of U.S. energy.

It may be tempting to think that the collapse in U.S. crude prices will be enough to bolster the trade, which has only spluttered since Washington and Beijing signed a deal aimed at helping efforts to balance trade between the two.

The historic plunge of the front-month West Texas Intermediate (WTI) futures contract into negative territory on Monday was something of a technical issue related to the lack of available storage for May delivery, but it does underscore that the market is awash with crude.

A more realistic price for U.S. light crude is the WTI Houston physical price, as assessed by commodity price reporting agency Argus.

WTI Houston was at $21.57 a barrel on Monday, less than a third of its peak so far in 2020 of $66.65 in early January, but also well above the negative $37.63 the front-month WTI futures contract finished at on Monday.

If, for instance, the WTI Houston price is assumed to be representative of the price a Chinese refiner would pay for spot cargo, the question becomes why aren’t buyers flocking to the grade?

The deal between Washington and Beijing, signed on Jan. 15, called for a huge increase in China’s imports of U.S. energy, amounting to an additional $52.4 billion over 2020 and 2021 over a baseline of $9.1 billion in 2017.

Most of the increase would have fallen on crude, although China was also expected to bulk up on imports of U.S. coal and liquefied natural gas (LNG).

However, since the deal was signed, China’s imports of U.S. energy have barely ticked higher, and while it may be tempting to blame the coronavirus outbreak, that’s clearly not the case.

Given the lag between buying a cargo of crude and delivering it from the U.S. Gulf to China, it would have been unreasonable to expect much of an uptick in imports of U.S. energy before April.

Indeed, there was no U.S. crude imported by China in the first three months of 2020, and none is scheduled to arrive this month either.

For May, only three tankers, carrying a mere 4.63 million barrels, were expected to arrive before the end of the month, according to vessel-tracking and port data compiled by Refinitiv.

For June, it’s even more dismal, with only one cargo currently under negotiation, although it’s possible that more vessels can be arranged with a May departure date and a June arrival.  ...

 

 

 

Tom,

How have you been? Hope all well and staying healthy and safe.

China has been buying the ultra cheap US Crude oils from March and they increased the volumes in April big time, buying everything from WY crude, Bakken, ANS and USGC barrels. The Chinese SOE's and private entities have been stocking up on these US barrels for their storage demand, which is about 200,000,000 bbls atleast.

Also, Chinese SOE's have been buying US crudes via third parties and using Singapore and other locations to blend the crude oils either onshore or on tankers. This was done to bypass the 25% tariff on US crude and many Chinese SOE's and private groups have received Chinese Gov. "exemptions" from tariffs to import US crudes.

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26 minutes ago, ceo_energemsier said:

 

 

Tom,

How have you been? Hope all well and staying healthy and safe.

China has been buying the ultra cheap US Crude oils from March and they increased the volumes in April big time, buying everything from WY crude, Bakken, ANS and USGC barrels. The Chinese SOE's and private entities have been stocking up on these US barrels for their storage demand, which is about 200,000,000 bbls atleast.

Also, Chinese SOE's have been buying US crudes via third parties and using Singapore and other locations to blend the crude oils either onshore or on tankers. This was done to bypass the 25% tariff on US crude and many Chinese SOE's and private groups have received Chinese Gov. "exemptions" from tariffs to import US crudes.

Thanks ceo_ I see you are doing well.

As usual, China works its way around trade agreements to its advantage.

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5 minutes ago, Tom Kirkman said:

Thanks ceo_ I see you are doing well.

As usual, China works its way around trade agreements to its advantage.

Exactly, its 2 things with them, save a buck and make a buck!!!! and screw the world!

 

 

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SINGAPORE (Reuters) - Companies selling crude and condensate in Asia have added a new clause in contracts that prevents prices of their oil from falling below $0, eight sources with knowledge of the matter told Reuters on Thursday.

Oil markets were stunned on April 20 when U.S. crude futures collapsed into negative territory for the first time in history, as a coronavirus-induced supply glut and lack of storage saw desperate traders paying to get rid of oil.

The new clause comes as sellers in Asia seek to protect their interests, as prices of some physical crude grades sold in the region have fallen to close to $10 a barrel due to heavy discounts, the sources said.

The sources are involved in a range of crude grades from Asia's regional low-sulphur crude, to ultra-light condensate, to Russian and Middle East high-sulphur crude.

These grades in Asia are priced off dated Brent, which recently fell below $20 a barrel, and Dubai quotes, while sellers are offering cargoes at deep discounts amid oversupply and weak demand as a result of the coronavirus pandemic, the sources said.

The zero dollar clause was first used in north America as major oil companies and those involved in U.S. shale earlier this month introduced the clause to avoid having to pay buyers to take oil away.

Most Asian buyers have shown high acceptance of the newly added clause that protect sellers' interests, they added.

"If not, no cargo," said a first source at a trading house.

While every company's legal languages differ, the core of the clause is that "dollar per barrel of oil will not be lower than zero under any circumstance", said a second source, who works with an oil producer. The cargoes will still be delivered with the minimum price being $0.

"It's something all sellers try to get into their sales contract. Crude, condensate or products. No one wants to pay the buyer to lift their barrels," said a third source, with an oil major.

For now, the clause looks most relevant for sales of condensate in Asia, as the ultra light oil is heavily discounted and performing worse than other crude in the physical market, four of the sources said.

"No one ever expected prices to go negative!", said a fourth source, who works with another oil producer, adding the clause had recently been added to its contracts.

Sellers of Middle East crude, except the national oil companies, have also requested the clause in their cargo sales, said two of the sources, who trade Middle East barrels.

A seventh source at an Asian refinery confirmed such a clause has been added to its contracts, with the minimum price set at $0 or $1 a barrel.

All of the sources declined to be named due to the sensitivity of the matter.

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On 5/1/2020 at 4:06 AM, Marcin2 said:

The best long-term business decision for Apple or Samsung or any other multinatiomal is to:

- lose all Chinese clients

or 

- stop using US technology.

I think both are using older tech for their China market, it is a luxury item there and a shrinking share. The local makers have filled the bottom end and moved up to midlevel phones. The China mass market in phones is dead for Apple Samsung Sony HTC etc. If they make any more there it will only be local market phones. Only Apple still produces in China. Their contractor Foxcon never managed to bring up the Factory they built in the US to installation of equipment, because staffing was very difficult. It should be easier now with 30 million unemployed. Apple's phones are also being made in India, so far only their lowest models. 

Contrary to your thinking, the China market has peaked. It will have a nice rise in car sales for a year or two as people are not going to use public transport if they can avoid it. But the car buying demographic is shrinking. 

The myth of the ever growing Chinese middle class is dying this year. 

As usual, you are reading the wrong analysis. Interpreting from the wrong angle. China is already through the looking glass, its future is the opposite of its past. 

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On 5/1/2020 at 1:55 PM, ceo_energemsier said:

"No one ever expected prices to go negative!", said a fourth source, who works with another oil producer, adding the clause had recently been added to its contracts.

 

We here and Zeihan , and Was it Art Berman? were talking about the possibility of negative prices. I didn't expect it to happen, at least not this early, since storage was available, particularly old dirty tankers. They never got that high a bid.

image.png.17220a49e1f23ccc44c1201d558ddfe2.png

The normal newer "clean tankers" are where the action is. Or was, their rates just fell. Meaning that the resumption of economic activity is starting to get tankers unloaded in Europe and other countries that had slowed down. 

image.png.f0849d82df7009c21ec0f72fc4afc66b.png

 

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On 4/30/2020 at 11:53 AM, Marcin2 said:

I hope Apple would switch all their production to any other country till November 2020.

Nice idea, but won't happen. China is also one of Apple's biggest markets. 

Apple is run by a Supply Chain person who is legendarily deliberate. I'd bet the house they are working to dramatically reduce China dependencies. And arranging it so US market gear doesn't go through China has to be in their plans. I can't see who India is a viable alternative. Or the US. The western hemisphere is roughly half Apple's revenue. 

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