USO climbs 1.56% after China halts fuel exports outside Hong Kong and Macau
Beijing began a week-long holiday without issuing export permits to major refiners, and USO, the crude oil fund, is up 1.56% at $147.93 a share
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Chart: USO, a fund that tracks crude, one-minute prices, three sessions
Brent crude is trading higher on Thursday after China suspended exports of oil products, according to Reuters.
The suspension covers gasoline, diesel and jet fuel shipments to destinations beyond Hong Kong and Macau, not crude oil exports, according to Reuters reporting carried by the China-Global South Project. Beijing began a week-long national holiday on October 1 without issuing export permits to major refiners for shipments outside those two markets, Reuters reported via Quartz. State oil major PetroChina canceled a handful of gasoline and jet fuel shipments planned for October, most of which it had committed to in the prior two weeks, according to the China-Global South Project. Privately held Zhejiang Petrochemical Corp scheduled no oil product shipments during the holiday week, Reuters reported.
Sources could not say whether export permits would resume once the holiday ends on October 7, with domestic inventories and refining output likely to factor into that decision, according to Reuters. Beijing had previously restricted fuel exports in March after the US-Iran war disrupted Middle Eastern crude supplies, then eased those curbs between July and September, making this a renewed tightening, Reuters reported. UBS analyst Giovanni Staunovo said the move points to concerns about domestic product availability and that it is unclear whether the measures will support higher crude imports after recent drawdowns in Chinese stocks, according to a Reuters report carried by Mediaselangor. A global diesel shortage tied to the wars in Iran and Ukraine is unlikely to ease before next year, Reuters reported, citing storage market indicators and industry participants.
The suspension marks a sharp break from the pattern of managed trade and de-escalation that has shaped US-China coverage since Xi's visit, including tariff exemptions and the $30 billion in tariff cuts the two countries unveiled on September 29. China's trade dispute with the EU remains unresolved even as the US-China tariff deal advances.