- Oil falls from a five-week high amid China's renewed Covid lockdowns
- WTI fell by nearly 1.5% this morning to trade below $90/Bbl
- Chinese cities imposed fresh lockdowns and travel restrictions after the number of new daily COVID-19 cases tripled during a weeklong holiday to the highest since August
- China's "zero Covid" policy weighed on the market amid anticipation of weaker fuel demand
- The French government warns that it may take control of some refineries due to ongoing worker strikes that are resulting in nationwide fuel shortages (BBG, Reuters)
- French Finance Minister Bruno Le Maire advised that citizens “cannot be “collateral victims” of a labor conflict and a resolution is needed in the “coming hours,” not weeks
- The strikes and unplanned maintenance at refineries have taken offline more than 60%, or nearly 0.740 MMBbl/d, of national refining capacity offline, forcing France to import more at a time when global supply shortages have pushed up diesel costs
- French diesel imports were up more than 70% so far in October, compared with the full month of September
- Imports in October so far reached over 0.590 MMBbl/d, up 37% from October 2021 levels, according to oil analytics firm Vortexa
- Asian refiners purchased at least 12 MMBbl of American crude oil in the past two weeks as the strike in France weakened demand from one of Europe’s largest buyers
- Refiners, primarily from South Korea, have purchased WTI Midland for January delivery at a premium of about $9/Bbl over the Dubai benchmark, according to traders
- With U.S. sellers now having access to that price level, WTI is now more desirable in comparison to Middle Eastern barrels, which Asian refiners can normally get more affordably due to shorter distance