Light, sweet crude oil for both September and October delivery gained by more than $1 yet still settled under $53/bbl for each contract on the New York market Aug. 8 during a week of oil-market volatility based largely upon US-China trade relations.
Chinese crude imports rose to historic levels through much of this year’s first half, RBC Capital Markets analyst Michael Tran said in a research note. For the first half of this year, Chinese crude imports surged by 740,000 b/d compared with first-half 2018.
“But the breakneck pace of imports has slowed to 9.8 million b/d over the past 3 months,” Tran said. “China also built inventories at a ferocious rate of over 345,000 b/d, on average, over first-half 2019.
“We suspected that the record pace of imports to build storage was largely for energy security purposes given that Iran and Venezuela historically comprised nearly 10% of Chinese imports,” Tran said, noting China’s recent yuan revaluation makes oil imports more expensive because oil is traded on most world markets in US dollars.
“China can dig into its war chest of inventories at will rather than pull barrels from the open market,” Trans said.
Energy prices
Light, sweet crude oil on the New York Mercantile Exchange for September delivery gained $1.45 to settle at $52.54/bbl on Aug. 8 while the October contract rose $1.43 to $52.46/bbl.
The NYMEX natural gas price for September increased 4.5¢ to a rounded $2.13/MMbtu.
Ultralow-sulfur diesel for September gained 2¢ to $1.77/gal. The NYMEX reformulated gasoline blendstock for September added 2.5¢ to a rounded $1.65/gal.
Brent crude for October gained $1.15 to $57.38/bbl. The November contract rose $1.11 to settle at $57.04/bbl.
Gas oil for August increased $9 to $542.75/tonne on Aug. 8.
The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Aug. 8 was unavailable because the OPEC offices are closed Aug. 9-13.
Contact Paula Dittrick at [email protected].
