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China is still reluctant to buy US crude oil

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The end of the ceasefire in the US-China trade war and the highly unpredictable nature of next steps in crude oil trade have made traders in China even less willing to buy US crude despite the favorable economic conditions, Chinese traders said & P Global Platts.

Chinese refineries and traders have been abstaining from US crude oil for months in the midst of the trade war, despite the absence of tariffs on US oil in China. The escalation of the trade war earlier this month when US President Donald Trump said the United States would levy a 1

0 percent tariff on the remaining $ 300 billion of Chinese imports that were not yet subject to duty China's oil traders and refiners were reluctant even more, to contract US loads.

"They will only buy if the US stops their tariffs and withdraws the statement that China is a currency manipulator," a Shanghai-based trader told a US crude oil supplier to S & P Global Platts Not In Place and spot cargoes and do not even think about long-term agreements.

However, some Chinese companies have such long-term deals as Unipec, the trading unit of China's largest refiner Sinopec. According to S & P Global Platts, Unipec's actual crude oil imports from the United States to China are much lower than their purchased volumes, as many of the US-made cargoes sold to third parties are halfway to China.

This month, refining and trading sources told S & P Global Platts that US crude oil is unlikely to become the target of potential Chinese retaliatory tariffs. US crude oil is currently not a significant trade item between the United States and China, and China is likely to target goods that could hurt more US exporters and have maximum impact on US exports, S & P told Global Platts.

By Tsvetana Paraskova for Oilprice.com

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