Exporters of US sour crude oil have reduced their offers for Asian buyers on concern that demand may fall as China threatens to impose tariffs on oil from the United States and expected increase in supply from the Middle East, Reuters reported on Wednesday, citing multiple trade sources.
Beijing’s tariff decision is part of an escalating trade dispute between China and the US.
US oil sellers “are worried about the trade war and they panicked. China’s buying has slowed as most of the refineries are pending (purchases),” said one of the sources, a buyer with a North Asian refiner.
Sellers are currently offering the US sour crude grade Mars to Asian buyers for delivery in October at $1 to $1.5 a barrel above Dubai quotes on a cost-and-freight basis, on par with Middle East sour crude Oman, the sources said.
That is down at least 50 cents a barrel from the Mars sale prices for September delivery, they said.
“Many traders are keen to offer US crude to us. We plan to buy if the price goes lower,” said the North Asian refinery source.
The price cut from US sellers also follows Saudi Arabia’s plan to raise its sour crude output to comply with the latest decision of the Organization of the Petroleum Exporting Countries (OPEC) to increase production.
An influx of cheaper US sour crude may depress Asia’s demand for spot Middle East oil for a second month in July, when September-loading cargoes trade, the sources said.
Comments
{{DisplayName}}
{{ElapsedTime}}