China's Unipec accelerates U.S. crude purchases after Saudi oil attacks

By Devika Krishna Kumar and Collin Eaton NEW YORK (Reuters) - China's Unipec, the trading arm of Asia's top oil refiner Sinopec, chartered at least four crude tankers this week from the United States, ramping up shipments after attacks on Saudi Arabia's oil facilities and as trade tensions between the world's two largest economies cool, sources said on Tuesday. Three Aframax vessels that can carry about 750,000 barrels, and one supertanker that can hold about 2 million barrels of crude, have been chartered by Unipec tentatively, according to a shipping source and Refinitiv Eikon data.

Reuters September 18, 2019 03:05:38 IST
China's Unipec accelerates U.S. crude purchases after Saudi oil attacks

Chinas Unipec accelerates US crude purchases after Saudi oil attacks

By Devika Krishna Kumar and Collin Eaton

NEW YORK (Reuters) - China's Unipec, the trading arm of Asia's top oil refiner Sinopec, chartered at least four crude tankers this week from the United States, ramping up shipments after attacks on Saudi Arabia's oil facilities and as trade tensions between the world's two largest economies cool, sources said on Tuesday.

Three Aframax vessels that can carry about 750,000 barrels, and one supertanker that can hold about 2 million barrels of crude, have been chartered by Unipec tentatively, according to a shipping source and Refinitiv Eikon data.

The attack on Saudi oil facilities on Saturday knocked out half of Saudi Arabia's oil production, or 5% of global output, sending prices soaring and setting off a flurry of inquiries for export cargoes out of the U.S. Gulf Coast in anticipation of a prolonged outage.

Imports of U.S. oil into China soared in August, ending the month at 505,000 bpd as Chinese purchasers likely rushed to import U.S. oil ahead of a 5% tariff that came into effect this month, analysts at Kpler said on Monday.

This week, Unipec chartered Aframaxes FSL Piraeus, Philotimos and Searanger along with the Very Large Crude Carrier (VLCC) New Solution, after the attacks, according to the source and Refinitiv Eikon data.

Unipec's new shipments came to light as the window to profitably ship U.S. crude on supertankers to Asia and Europe narrowed significantly on Tuesday, quelling the sharp rise in Gulf Coast chartering inquiries.

Freight rates for VLCCs from the U.S. to Asia had jumped following the Saudi attacks, to between $7 million to $8 million per vessel, shipbrokers said. Chartering for smaller classes of oil tankers was still active, the sources added.

The spread between U.S. crude and global benchmark Brent narrowed to $5.55 a barrel on Tuesday after hitting the widest in nearly two months a day earlier.

Futures dropped following a Reuters report that Saudi output might return fully within a few weeks, faster than anticipated, according to a top Saudi official. China imports more Saudi crude oil than any other nation, averaging 1 million barrels per day (bpd).

As the spread narrowed, U.S. cash crude differentials weakened. West Texas Intermediate (WTI) crude at Midland, Texas, considered the nation's flagship crude, traded at parity to U.S. crude, down from a 75-cent premium on Monday. Coastal grade WTI at East Houston, or MEH, fell to a $3.25 a barrel premium, down $1 from Monday.

(Reporting by Devika Krishna Kumar in New York and Collin Eaton in Houston; Editing by Chizu Nomiyama and Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.