Oil Tops $102 as China's Demand Returns to Market — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- U.S. crude oil topped $102 per barrel on Thursday for its highest close since May, up about 50% from the summer low of $68.55 reached shortly after the June 17 U.S.-Iran memorandum of understanding collapsed.
- The rally came as Middle East fighting escalated, with Saudi Arabia's crucial East-West oil pipeline shut down after multiple attacks.
- China has acted as a swing consumer that suppressed prices earlier in the war by slashing imports by 3-5 million barrels per day, but Beijing's refiners are now "coming off the diet" and bidding crude up, per Rapidan Energy's Bob McNally.
- Chinese refiners face strong incentives to re-enter the market because diesel profit margins have soared as the Iran and Ukraine wars knocked out significant global refining capacity.
- China's imports plunged to a wartime low of about 6 million bpd in June — nearly 50% below 11.5 million bpd in February — before rebounding to roughly 7 million bpd in July and August, per Kpler data.
- Global inventories have plunged by 400 million barrels over more than six months of war, eroding the buffers that previously contained price spikes, per the U.S. Energy Information Administration.
Why it matters: China's pivot from austerity buyer to active bidder is the swing factor between oil stabilizing near $100 and breaking the April 7 wartime high of $112.95 — a level that would deepen pressure on the Trump administration, whose "jawboning about peace" is losing its grip on trader sentiment, per Rapidan Energy's McNally.
Ask SkimNews
