Asian refiners could find plenty of bargain spot crude cargoes in the third-quarter as the recent cuts in major Middle Eastern crude official selling prices, and China's ongoing threats to impose hefty import duty on USA oil could set the stage for intense price competition between North American and Persian Gulf crude suppliers. Higher oil prices tend to increase trade deficits, as more money is paid for foreign oil.
Sources at South Korean refining companies and a Chinese trading firm indicated that light sweet and medium sour USA crude suppliers may have to step up efforts to remain competitive in the Asian market, especially due to China's continued threats to levy a 25% tariff on American energy products.
On Tuesday, Sec. Pompeo seemed to strike a different tone.
Portfolio managers hold the most lopsided position in WTI since June 2014, when Islamic State fighters were racing across northern Iraq and threatening the country's oilfields.
Finally, we have to continue to expect production from Saudi Arabia, Russia and the U.S.to rise. "In our meeting with the Saudi energy minister, we discussed maintaining a well-supplied oil market to guard against volatility", the unnamed official told reporters, according to Reuters.
Fears that a U.S. The country has emerged as one of the biggest buyers of American oil since the US lifted a ban on crude exports in 2015.
If realised, both of these forecast levels would surpass the previous record of 9.6 million barrels per day set in 1970.
Even if demand remains strong, OPEC production will be more than enough to satisfy the market.
An escalating U.S. -China trade row also helped depress oil prices as it raised the prospect of faltering global growth and lower energy consumption, particularly in emerging markets.
Crude oil prices are now lower.
The specter of tariffs on a further $200 billion of Chinese goods sent commodities lower, along with stock markets, as tension between the world's biggest economies intensified. The tariffs are only proposed, for now, and wouldn't take effect for two months.
The sell-off intensified after news of a fall in US crude oil inventories failed to reverse market sentiment. The agency said that stocks fell by whopping 12.6 million barrels in the week ending on July 6.
Figures like that from the EIA would typically lead to a spike in prices.