In the same week that the United States overtook Russia as the world’s largest producer of crude oil and gas, and President Donald Trump used someone else’s words to praise himself and to bash Russian President Vladimir Putin on Twitter, import data from China, released Friday, showed the world’s second-largest economy imported no crude at all from the U.S. during December, and that Russia was the biggest crude supplier to China for the whole of 2018. The overall U.S. crude exports to China in 2018 were higher than the previous year, increasing by almost 25 percent to over 240,000 barrels per day (bpd). That number could have been higher had the December imports not come in at zero. U.S. exports to China have been affected negatively by the ongoing trade tensions between the world’s two biggest economies. Even though the two countries continue negotiations to end the impasse, reduced imports by China — the world’s largest importer of crude oil — could hurt the U.S. Click read more below for additional detail.
Oil traded near the lowest close in a week as U.S. crude stockpiles unexpectedly increased, keeping supplies at the highest in at least three decades with the peak summer demand period approaching its end.
Futures were little changed in New York after falling 2.8 percent Wednesday. Inventories rose by 2.5 million barrels last week, according to the Energy Information Administration. The median forecast in a Bloomberg survey had projected a decline. Iraq will attend informal OPEC talks next month in Algiers, Deputy Oil Minister Fayyad Al-Nima said in a phone interview.
Oil entered a bull market on Aug. 18, less than three weeks after tumbling into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of Petroleum Exporting Countries and other producers may lead to action to stabilize the market. U.S. crude supplies remain more than 100 million barrels above the five-year average as the nation’s summer driving season approaches its end on Labor Day, Sept. 5.
“Crude oil imports continue at a strong pace,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. “If imports do not stop, then stocks will rapidly reach tank top once refineries start their fall maintenance program,” he said.
West Texas Intermediate for October delivery was at $47.01 a barrel on the New York Mercantile Exchange, 24 cents higher, at 10:53 a.m. in London. The contract slid $1.33 to $46.77 on Wednesday, the lowest close since Aug. 16. Total volume traded was about 25 percent below the 100-day average.
Brent for October settlement was 21 cents higher at $49.26 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 91 cents, or 1.8 percent, to $49.05 on Wednesday. The global benchmark crude was at a $2.25 premium to WTI.
U.S. crude stockpiles expanded to 523.6 million barrels through Aug. 19, the EIA reported Wednesday. Supplies were forecast to decline by 850,000 barrels, according to the median estimate in a Bloomberg survey of analysts. Gasoline inventories increased by 36,000 barrels to 232.7 million, the EIA said.