WTI crude surges $2.45 after China halts fuel exports and U.S. reinforces Middle East presence

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West Texas Intermediate crude futures on the New York market closed higher on Thursday, October 1, after reports that China ordered a halt to refined fuel exports, a move that could worsen an already tight global fuel supply picture, and prices also drew support from reports that the United States is sending additional troops and an aircraft carrier to the Middle East. November-delivery WTI crude rose $2.45, or 2.71%, to settle at $92.87 a barrel, while November-delivery Brent crude rose $4.28, or 4.37%, to settle at $102.31 a barrel. Reports said China's government has instructed Chinese refiners to suspend exports of refined fuel products for October in order to preserve domestic stockpiles, after previously announcing in March that it would restrict fuel exports because the war with Iran disrupted crude supplies from the Middle East, before easing those controls in July and managing exports of diesel, gasoline and jet fuel on a monthly basis. On Wednesday, September 30, PetroChina, a major state-controlled Chinese oil company, cancelled a number of planned October shipments of gasoline and jet fuel, while Zhejiang Petrochemical scheduled no fuel product shipments during the holiday week. Prices also rose after The Wall Street Journal reported that the United States is sending a third aircraft carrier and an additional 10,000 troops to the Middle East, as President Donald Trump weighs renewed strikes on Iran after the U.S. midterm elections in November. Trump told reporters at the White House before departing for a campaign event that he is considering various options on Iran, adding that Iran must agree to a fair deal or face collapse. More broadly, although crude supply continues to reach the market, diesel and other refined products remain tight because of damage to refinery infrastructure in the Arabian Gulf region and Russia. Global diesel inventories are tight after Russia, a major exporter, announced it would extend its ban on diesel exports through the end of October, while industry experts expect such supply tightness to persist into next year. President Vladimir Putin said Russia will not export diesel to world markets until sanctions against Russia are lifted.

Impact on assets 4

Others▲
⛏Crude Oil WTI Futures
WTI
▲ PositiveSupplyrelevance

China's halt of refined fuel exports tightens global fuel supply, pushing WTI crude up $2.45 to $92.87.

⛏Heating Oil Futures
HEATOIL
▲ PositiveSupplyrelevance

China's suspension of refined fuel exports and already-tight distillate supplies support heating oil prices.

Others▼
PetroChina Co Ltd Class A
601857
▼ NegativeRegulationrelevance

China's government ordered refiners to halt October refined fuel exports, and PetroChina cancelled planned October gasoline and jet fuel shipments.