(Cheaper) American Oil Keeps Flowing to China Despite Mounting Trade War

Something else to befuddle the Mainstream Media pundits, who keep trying desperately to drum up bad news.

Related earlier thread:

So while the media in the article above ^ blame Trump for lower oil prices, this article below by Bloomberg seems perplexed that China continues to buy cheaper U.S. WTI which is currently $9 lower per barrel than Brent.

 

American Oil Keeps Flowing to China Despite Mounting Trade War

  • U.S. shipments to Asian nation seen increasing in May and June
  • Tankers headed to China haven’t rerouted even as tension rises

Washington’s escalating trade war with Beijing hasn’t choked off the flow of American oil to China.

At least six million barrels of U.S. crude set off for Chinese refineries in May, according to ship tracking data compiled by Bloomberg. In June, American shipments to the Asian nation are expected to reach at least 4 million barrels, according to shipping reports and data from Kpler. The volumes are a marked increase from April, when China took just one supertanker of U.S crude, about two million barrels.
 
U.S. oil may just be too cheap to pass up. West Texas Intermediate crude is selling for almost $9 per barrel less than the global benchmark Brent, down from around $6 in April. While global supply risks have boosted the price of Brent, growing American production has kept WTI weak, making it more appealing to international buyers.
 
"Clearly the trade war is a consideration," but the WTI discount to Brent is attractive, said Sandy Fielden, an analyst at Morningstar Inc. Purchases made now could be sold later for a higher price -- something Chinese companies started doing soon after the trade war began last year.  ...  
 
20190607_142252.jpg.9513863396444a6b126529161b3c2275.jpg

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21 minutes ago, AcK said:

Taking a slightly longer term picture Tom - doesn't look like much. Figure is China imports of US oil in mbd...

2146396527_blogfigure403.jpg.f2cad4b30ebaf3d02fe3c486ef52b765.jpg

A theory on China below... looks like it has been prepping for the Trade War possibility for a while.

https://determinedinvest.wordpress.com/2019/05/31/the-case-for-black-gold-closed/

I upvoted you for nudging me to take the longer term picture : )

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10 hours ago, Tom Kirkman said:

Something else to befuddle the Mainstream Media pundits, who keep trying desperately to drum up bad news.

Related earlier thread:

So while the media in the article above ^ blame Trump for lower oil prices, this article below by Bloomberg seems perplexed that China continues to buy cheaper U.S. WTI which is currently $9 lower per barrel than Brent.

 

American Oil Keeps Flowing to China Despite Mounting Trade War

  • U.S. shipments to Asian nation seen increasing in May and June
  • Tankers headed to China haven’t rerouted even as tension rises

Washington’s escalating trade war with Beijing hasn’t choked off the flow of American oil to China.

At least six million barrels of U.S. crude set off for Chinese refineries in May, according to ship tracking data compiled by Bloomberg. In June, American shipments to the Asian nation are expected to reach at least 4 million barrels, according to shipping reports and data from Kpler. The volumes are a marked increase from April, when China took just one supertanker of U.S crude, about two million barrels.
 
U.S. oil may just be too cheap to pass up. West Texas Intermediate crude is selling for almost $9 per barrel less than the global benchmark Brent, down from around $6 in April. While global supply risks have boosted the price of Brent, growing American production has kept WTI weak, making it more appealing to international buyers.
 
"Clearly the trade war is a consideration," but the WTI discount to Brent is attractive, said Sandy Fielden, an analyst at Morningstar Inc. Purchases made now could be sold later for a higher price -- something Chinese companies started doing soon after the trade war began last year.  ...  
 
20190607_142252.jpg.9513863396444a6b126529161b3c2275.jpg

What these type of data fail to take into consideration is that Chinese buyers for oil (and other commodities), also use trading houses and companies , to carry out trades, just like many other countries and companies, companies based in Geneve or Zug, or Zurich, or SIngapore, or Panama, or London or Miami and Houston or Dubai or where ever else. There has also been a lot of reverse lightering operations that took on US barrels and blended with crude from Central/S. Am going to the Far East, as well as cargoes going to Singapore and other places where they get co-mingled with other origin barrels and end up in China. Just like US soybeans cargoes mixed with Brazilian cargoes going to China and elsewhere.

Just a factor in the numbers.

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