US Oil Exports to China Narrows Trade Deficit
$USO, $OIL, $SHI
Few expected China to become a major buyer of US Crude Oil
Now, data in Thomson Reuters Eikon shows US Crude Oil shipments to China went from nothing before Y 2016 to a record 400,000 BPD in January, worth almost $1-B. Additionally, half a million tonnes of US Liquefied Nat Gas (LNG) worth almost $300-M, headed to China from the US in January.
The US supplies will help reduce China’s huge trade surplus with the US.
“With the Trump administration, the pressure on China to balance accounts with the U.S. is huge… Buying U.S. oil clearly helps toward that goal to reduce the dis-balance,” said the CEO and co-Founder of commodity trading house Mercuria.
As the energy exports rose, China’s January trade surplus with the United States narrowed to $21.895-B, from $25.55-B in December, according to official Chinese figures released Thursday.
The energy sales to China are still modest compared with the $9.7-B of Crude Oil shipped by the Organization of the Petroleum Exporting Countries (OPEC) to China in January.
“We see U.S. crude as a supplement to our large base of crude” from the Middle East and Russia, said a refinery manager for China’s Oil-major Sinopec (NYSE:SHI), declining to be named as he was not cleared to speak to media.
He said that Sinopec was looking to order more US Crude Oil this year.
China’s Crude Oil imports climbed to a record 9.57-M bbl in January, official data showed Thursda
US Crude Oil imports have fallen below 4-M BPD Vs a record 12.5-M BPD in Y 2005.
At average December/January volumes, American oil and gas sales to China would be worth around $10-B a year, including exports to Japan, South Korea and Taiwan, the figure 2X’s.
At around $60.50 bl, WTI Crude Oil is currently some $4 cheaper than Brent Crude , off which most other Crude Oils are priced.
Have a terrific weekend.