- Chinese buyers snap up U.S. oil purchases at widest discounts ever
Reuters reported how the Chinese have snapped up US oil interests when the coronavirus and the Russia/Saudi conflict drove oil below zero.
China has increased U.S. crude purchases with some buyers snapping up cargoes at the widest discounts ever as sellers seek to offload excess supplies in Asia, six trade sources said on Wednesday.
China started processing in March applications from its companies to waive import tariffs on U.S. energy goods as part of the Sino-U.S. Phase 1 trade deal and they have since bought liquefied natural gas (LNG) and liquefied petroleum gas (LPG) from the United States.
The world’s largest crude importer is boosting U.S. energy imports at a time when the world is swamped with excess supply after the Organization of the Petroleum Exporting Countries (OPEC) and Russia failed to extend production cuts and as measures to curb the spread of the coronavirus undermined demand.
Cheap U.S. energy supplies will help China lower its import costs, but the deep discounts will add further pressure on U.S. producers to shut in production after U.S. crude futures CLc1 slumped to their lowest since 2002.
U.S. Mars Sour crude has been sold to Chinese buyers at discounts between $7 and $9 a barrel to September ICE Brent futures for July arrival while the discounts for West Texas Intermediate crude (WTI) in Midland were between $6 and $7 a barrel, the sources told Reuters.
BP (BP.L) and Equinor (EQNR.OL) may have sold some of these cargoes, they said, while the buyers were not immediately known. BP declined to comment while Equinor could not be immediately reached for comment outside office hours.
“Only the Chinese are buying and the rest of the world are selling,” a Singapore-based trader said, leading to some “very aggressive offers” for U.S. crude into that market even though the oil’s benchmark is already at the lowest in 18 years.
In early March, independent refinery Panjin Haoye Chemical Co bought Mars crude from PetroChina in one of the first signs of Chinese refiners resuming U.S. crude purchases. Mars and WTI were then offered at spot premiums to benchmarks.
U.S. crude is mired in deep discount as producers, forced to clear pipelines stuck with unsold oil, are now flooding the U.S. gulf coast with cheap crude.
(Read more at Reuters)
Can we be surprised that history has repeated itself?
When oil prices dropped slightly in 2015, China took advantage of the lower prices. Why wouldn’t we expect that to happen again?
How Nancy Pelosi can try to block purchases to fill the Strategic Petroleum Reserve goes completely against all logic. How can she hate the oil industry so much that she wants to make nine American companies have to rent space in the Strategic Petroleum Reserve because prices are so low and oil storage space is so scarce? How can she hurt the taxpayer so much as to keep from filling the SPR when prices are at historic lows? How can she be so greedy as to demand more give aways when America suffers?
- Foreign powers test US defenses amid coronavirus pandemic
The Hill points out how foreign powers have taken advantage of the coronavirus pandemic.
U.S. adversaries are probing America’s defenses as the world is preoccupied with the fight against the coronavirus pandemic.
In the past two weeks, Russia, China, Iran and North Korea have all moved to test Washington in the sea, in the air and on land as U.S. forces have become more restricted in movement amid concerns over the spread of COVID-19.
“Exactly how distracted is the U.S. military? They want to know,” said Susanna Blume, the director of the defense program at the Center for a New American Security, referring to foreign countries.
On Tuesday, North Korea launched ground cruise missiles and air-to-surface missiles from fighter jets into the sea, the first time in three years Pyongyang had launched such projectiles. That followed a slew of short-range ballistic missile tests in March as the hermit nation took part in large-scale live-fire military training.
Then on Wednesday — exactly a week after Air Force jets intercepted two Russian patrol aircraft near Alaska — a Russian fighter jet came within 25 feet of a Navy reconnaissance aircraft while inverted, putting the U.S. “pilots and crew at risk,” the Navy said in a statement about the incident.
That same day, 11 ships from Iran’s Islamic Revolutionary Guard Corps Navy repeatedly came close to U.S. Navy and Coast Guard ships in “dangerous and harassing approaches” in the Gulf.
China, meanwhile, has been showing its force in the Pacific region, sinking a Vietnamese fishing boat in the South China Sea on April 2 and sending its aircraft carrier near Japan’s and Taiwan’s territorial waters.
“The Irans and the Chinas of the world are always looking for opportunities, and I think that they possibly see the potential for an opportunity right now given some of the public challenges that the military has had in adjusting its guidance to cope with the pandemic,” said Blume, a former Pentagon staffer. “That’s not going to be lost on them, certainly.”
Flexing their might is not new for these rival countries, but the difference now is that the U.S. military and the nation at large seems to be preoccupied in a way it hasn’t been before as it deals with the pandemic, said Jon Alterman, a global security expert at the Center for Strategic and International Studies.
If you think it was a mistake to include Democrats among America’s enemies, go back and read how Pelosi tried to block oil purchases into the SPR
If you were around to experience the oil embargo by the Arab states on America during the 1980’s, you remember high gas prices. Likewise, during the early 2000’s, we had $4/gallon gas. If the Chinese/Saudis/Russians are able to buy up, drive into the ground, or otherwise disable our oil industry — we will be paying the price.
Additionally, when a fuel-guzzling tank or air plane gets shrouded because there is no fuel, then we will be much less safe.