Chinese Fuel Imports Are Down
March 11, 2024
The Baker Hughes Rig Count had oil rigs down 7 to a total of 622 oil rigs. Last year at this time there were 746 oil rigs in operation. Despite the lower number of rigs, US crude oil production is still very strong reported last Wednesday in the DOE report at 13.2 million bpd.
Weak macro data has moved to the forefront of the news and that has overshadowed the OPEC+ supply cuts and putting selling pressure on prices.
US jobs report had 167,000 of revisions down for December 2023 and January 2024 and an unexpected rise in US unemployment to 3.9% will lower wage growth.
The market is also worried about the world’s largest oil importer, China of lower oil and fuel demand. China oil imports were 10.74 million bpd for January 2024 through February 2024, but down from 11.39 million bpd in December 2023. China crude oil imports peaked in August 2023 at 12.43 million bpd. However, since China is importing Russian oil, the numbers may be higher than reported.
The Federal Reserve meets next week on March 19th and 20th. This will be the next meeting to decide whether to hold to their previous rate cut outlook even with the economy continuing to outperform expectations.
EIA will release its short-term energy outlook this week and give the market a look at their estimation of whether there will be a surplus or a deficit in Q2. Some OPEC members have been overproducing in recent months and that could mute the latest announced extension of supply cuts but if, big if OPEC does manage to reduce production and supplies the market should tighten up at some point.