Chinese Fuel Exports Likely to Expand
April 19, 2021
Baker Hughes reported that 7 crude oil rigs came online last week in the US up to a total of 344 rigs. Oil rigs have risen by 172 rigs since August of 2020.
Prices continue to be supported by the falling US dollar and strong economic data for both China and the US. Pressuring prices lower is the concerns about rising cases of COVID-19 in Europe and Asia. India reported a record rise of infections raising its overall cases to over 15 million. The capital region, Delhi, has ordered six-days lockdown starting today.
According to data from Ursa Space Systems, China’s crude inventories have declined from a peak reached in October. Inventories were 956.2 million barrels, or 69.2% of capacity, in the week ending April 15th from 991.6 million barrels of 73% of capacity in early October.
Russian Deputy Prime Minister, Alexander Novak, said OPEC and its allies will gradually restore oil output between May and July. He added that Russia’s energy ministry was ready to support export cuts on oil products in order to support the domestic market.
China’s fuel exports are likely to expand by nearly a third this year as the world’s second largest oil consumer ads new refineries that will exacerbate a supply overhang. CNPC’s Economics and Technology Research Institute said an estimated 14.74 million tons per year, or 295,000 bpd of crude run capacity, will be added this year, bringing the country’s total to 18 million bpd. That could result in fuel exports increasing by 31.7% to a record 54.7 million tons.
The Wall Street Journal reports that, according to energy and restructuring law firm Haynes and Boone, bankruptcies by North American oil producers climbed to the highest first quarter level since 2016 as energy firms continue to struggle to recover from the carnage of the oil price crash in 2020.