- Oil trades higher as supply concerns offset demand worries
- August ’23 WTI gains 26c this morning to trade around $75.61/Bbl
- Equities trade higher, and the dollar strengthened relative to its recent lows
- US crude inventories at Cushing, OK, fell by the most since October 2021, but demand for key refined products continued to decline
- Despite the weak post-COVID recovery, China's June oil imports surged, driving stock levels near record highs
- The expectation that the Fed is near the end of its rate-hike cycle as inflation cools supports prices
- China imports record-high Russian crude in the first half of 2023 (Financial Times)
- China's Russian crude imports hit an average of 2.13 MMBbl/d in H1 2023, making Russia its top supplier, surpassing Saudi Arabia
- June saw another record, with Chinese imports of Russian crude reaching an average of 2.56 MMBbl/d, marking a 44% increase from June 2022 despite narrowing discounts on Russian oil
- Despite weak domestic demand, total Chinese oil imports surged in June 2023, with a 45.3% Y-o-Y increase to reach the second-highest monthly figure ever recorded (12.7 MMBbl/d) as refiners continue to build inventories
- Senate to vote on halting US SPR sales to China (Bloomberg)
- The US Senate is set to vote on an amendment seeking to block China from buying oil from the US's SPR, now at its lowest level in 40 years
- Initiated by Democratic Senator Joe Manchin and Republican Senator Ted Cruz, the bill mimics one already approved by the House, extending the sales ban to include Russia, North Korea, and Iran
- The legislation has emerged amid criticisms against the Biden administration's handling of the SPR, and allegations of unauthorized transfers to China-owned enterprises
- However, the White House maintains that SPR oil sales are legally required to go to the highest bidder, irrespective of nationality, and last year's release was to mitigate Ukraine conflict-related price surges