China Snaps Up Crude Oil As Prices Tumble
International Business Times
Published Oct 27, 2014 10:34AM ET
Updated Oct 27, 2014 11:00AM ET
China Snaps Up Crude Oil As Prices Tumble
By Maria Gallucci - China is snapping up unusually high amounts of crude oil as global prices hit their lowest level in years, Wall Street Journal reported Monday. The buying spree could boost the weak international demand for oil, which has helped to push down prices by more than 25 percent over the past five months, analysts say.
A unit of state-run China National Petroleum Corp. has purchased 36 cargos of crude oil in the open market so far in October, Singapore traders told WSJ. The oil haul, equal to about 18 million barrels of crude, is the country’s largest purchase in a single month and hails primarily from Oman and the United Arab Emirates.
The crude is thought to be destined for China’s emergency oil stores, which the country could tap during a crisis to produce transportation fuels like gasoline and diesel. China’s current thirst for oil, meanwhile, remains low, with demand growing at its slowest rate since 1990, WSJ noted.
The large-scale purchase indicates that Chinese oil officials are expecting prices to eventually bounce back, and that they are capitalizing on the cheap crude while they can. But Goldman Sachs analysts said they project prices will fall even further next year as worldwide production -- led by U.S. developers -- outpaces demand.
In a report released late on Sunday, the U.S. investment bank said it expects benchmark Brent crude prices to drop to $85 a barrel in the first quarter of 2015, while U.S. benchmark West Texas Intermediate (WTI) crude could fall to $75 a barrel. Both prices are down by $15 per barrel from the bank’s previous oil price forecast.
Brent crude prices fell to below $85 per barrel on Monday, and WTI crude dipped below $80 per barrel, following the Goldman report, Reuters reported.
Get The News You Want
Written By: International Business Times
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.