Jie Zhao | Corbis | Getty Images
A female staff works at a gas station in Huaibei, Anhui province, China.
Chinese crude oil imports hit the second highest level on record last month, along with U.S. oil producers are reaping the benefits.
U.S. crude oil imports into China hit an all-time high in November, according to figures coming from ClipperData. The tanker-tracking firm reports of which 289,000 barrels a day of U.S. crude hit Chinese shores by the end of the month.
of which is actually a smaller share of the 9.01 million barrels a day of which China imported in November, nevertheless the idea shows of which U.S. producers continue to make inroads into the country two years after Congress lifted a 40-year ban on crude oil exports.
Chinese imports of U.S. crude oil, source: ClipperData
The United States has been able to penetrate the market in part because OPEC, Russia along with nine some other oil exporters are limiting their production in order to balance an oversupplied market. of which has allowed U.S. producers to capture some of China’s growing crude oil demand.
nevertheless there’s a bigger factor at play in recent months, according to Matt Smith, director of commodity research at ClipperData. U.S. crude is actually trading at a significant discount to international oil prices.
The cost difference between U.S. West Texas Intermediate crude along with international benchmark Brent crude expanded This particular fall after Hurricane Harvey shut down U.S. Gulf Coast refineries. of which suppressed the cost of WTI, doing the idea attractive to overseas buyers. The Chinese purchases commenced around of which time, according to Smith.
The cost spread between WTI along with Brent has narrowed since then, nevertheless still stands at about $6 a barrel. of which helped to drive total U.S. crude oil exports to an all-time high above 2 million barrels a day in October.
U.S. exports to China are “truly going to depend on the spread,” Smith said. “We’re still here at over $5 on the Brent-WTI spread along with so as long as of which U.S. crude is actually discounted the idea will be bought up by Asia or Europe.”