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

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

Reuters  | Sep 17, 2019 21:15

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

By Devika Krishna Kumar and Collin Eaton (NYSE:ETN)

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.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

More markets insights, more alerts, more ways to customize assets watchlists only on the App is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.