Oil Updates — Prices fluctuate; China’s crude oil imports hit 10-month high

Oil Updates — Prices fluctuate; China’s crude oil imports hit 10-month high
US crude futures clawed back earlier losses and were steady from the previous close at $74.25 a barrel. (Shutterstock)
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Updated 07 December 2022

Oil Updates — Prices fluctuate; China’s crude oil imports hit 10-month high

Oil Updates — Prices fluctuate; China’s crude oil imports hit 10-month high

RIYADH: Oil prices continue fluctuating on Wednesday after Brent crude earlier fell close to its lowest in 2022, as hopes of higher Chinese demand offset concerns about recession and eased fears that a Western cap on Russian oil prices would curb supply.

China announced on Wednesday the most sweeping changes to its anti-COVID regime since the pandemic began, loosening rules that curbed the spread of the virus but hobbled the world’s second largest economy and sparked protests.

Brent crude was down 11 cents at $79.24 a barrel by 04.00 p.m Saudi time. It touched $77.74 earlier, the lowest since Jan. 3.

US West Texas Intermediate crude added .03 cents, or 0.04 percent, to $74.28, after touching $72.75 a barrel, the lowest since late December.

China November crude oil imports hit 10-mth high 

China’s crude oil imports in November rose 12 percent from a year earlier to their highest in 10 months, data showed on Wednesday, as companies replenished stocks with cheaper oil and new plants started up. 

The world’s largest crude importer brought in 46.74 million tons of crude oil last month, equivalent to 11.37 million barrels per day, according to data from the General Administration of Customs. 

That was up from 10.16 million bpd in October and 10.17 million bpd in November 2021. 

Chinese state refiners stepped up purchases of US crude oil, taking advantage of arbitrage opportunities, while maintaining high imports of Russian oil ahead of the Dec. 5 European embargo and imposition of an oil price cap. 

Independent traders last month also moved a record amount of deeply discounted Iranian crude passed off as oil sourced from Malaysia, Oman or elsewhere in the refining hub of Shandong province, according to tanker tracker Vortexa Analytics. 

The higher imports resulted in a crude oil stock build of 41 million barrels over the month, Vortexa estimated. 

Imports for the first 11 months of the year totaled 460.26 million tons, or about 10.06 bpd, down 1.4 percent from last year’s corresponding period. 

Wednesday’s data also showed fuel exports reached 6.144 million tons, the highest since June 2021 and up from 4.456 million tons in October, reflecting Beijing’s additional release of quotas. 

Year-to-date exports, at 46 million tons, remained 19 percent below year-ago levels due to a broad curb on fuel exports earlier in the year. 

Turkish straits tanker delays not due to Russia oil price cap: official 

Disruptions in tanker traffic from Russia’s Black Sea ports to the Mediterranean result from a new Turkish insurance rule, not the price cap on Russian oil agreed by a coalition of Group of Seven countries and Australia, an official with the group said on Tuesday. 

Of the 20 loaded crude oil tankers facing delays in the region, all but one appear to be carrying Kazakh — not Russian — origin oil and would not be subject to the price cap “under any scenario,” the official said. 

“There should be no change in the status of their insurance from Kazakh shipments in previous weeks or months,” the official added. 

Markets are closely watching the impact of a G7-led price cap on Russian seaborne oil that took effect on Monday, but G7 officials say the measure did not cause the backup in Turkiye’s Bosphorus and Dardanelles straits into the Mediterranean. 

 “The price cap policy does not require ships to seek unique insurance guarantees for each individual voyage, as required under Turkiye’s rule,” the official said. “These disruptions are the result of Turkiye’s rule, not the price cap policy.” 

(With input from Reuters)