Chinese Bargain Hunters Are Stocking Up On Ultra Cheap Crude Oil

Oil & Gas
1832 VIEWS
Proshare - Facebook Proshare - Twitter Proshare - Linked In Proshare - WhatsApp
Proshare


Friday, April 17, 2020/04:48 PM / by Tsvetana Paraskova of Oilprice.com / Header Image Credit: Oilprice

Emerging from the coronavirus lockdown, China's oil refiners are buying ultra-cheap spot cargoes from Alaska, Canada, and Brazil, taking advantage of the deep discounts at which many crude grades are being offered to China with non-existent demand elsewhere.  


Proshare Nigeria Pvt. Ltd.

 

The discounts of spot cargoes of Canada's Cold Lake blend, Alaska North Slope, and Brazil's Lula grades vary between $5 and $9 a barrel to Brent, traders in Asia told Bloomberg on Friday.


China's refiners are said to be pretty much the only buyers of spot crude right now, as both state-owned corporations and independent refiners-commonly known as 'teapots' - are taking advantage of the cheapest oil in years to stock up on crude worth $15 a barrel or less.

Independent refiners bought spot cargoes of Cold Lake from a European trader at a discount of $8-$9 a barrel to Brent, while Alaska North Slope and Brazilian grades have been sold at a $5.50-$6 per barrel discount to the international benchmark price.

 

Refiners in China kept their processing rates low in March, because of the slump in local demand due to the pandemic and the lockdowns. Still, signs point to some recovery after the end of the lockdown in China, at least in demand for ultra-cheap crude for April and May.

Refinery runs in China hit their lowest in 15 months in March, according to data from China's statistics bureau on Friday, compiled by Reuters.

 

China-based analysts told Reuters that toward the end of March, refiners started to recover some of the utilization rates at refineries with fuel demand rising from earlier this year when China was the hotspot of the pandemic.


Proshare Nigeria Pvt. Ltd.


In March, China's crude oil imports rose by 4.5 percent on the year, but dropped compared to January-February. However, independent refiners began ramping up bookings for crude arrivals in March and April as early as at the end of February.

 

Import in April and May are expected to rise from the March levels as demand is slowly returning, and refiners are looking to buy ultra-cheap oil, Li Yan, senior analyst at Longzhong Information Group, told Reuters.

Proshare Nigeria Pvt. Ltd.

Related News

  1. OPECplus Deal Reduces Downside Risks, Surplus Not Eliminated
  2. Nigeria Must Deregulate Its Petroleum Sector Post COVID-19 - Boniface Chizea
  3. IEA: Huge Oil Build Threatens To Fill Up Global Storage Within Weeks
  4. Oil Hits $20 for WTI and $30 for Brent After API Reports Mega Crude Inventory Build
  5. Oil Falls As Saudi Arabia Launches New Price War With Record Discounts
  6. Oil Prices Plunge On Grim IMF Economic Forecast
  7. OPECplus Powerless As Oil Prices Near $30
  8. Oil Supply Deal: Market Stability Desired
  9. Historic Production Cuts: Implications for Nigeria
  10. Goldman Sachs: Don't Expect Oil Prices To Rise On Historic Oil Deal
  11. Trump Wants OPECplus To Double Its Production Cut
  12. G20 Oil Nations Agree To 3.7m Bpd Cut
  13. OPECplus Agrees To Less Than 10m Bpd Cut
  14. Oil Prices Crash Towards $30 Despite Historic Cuts - OIR 100420


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP