Oil starts lower on reports of China buying Russian crude

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May 19, 2022 | 8:04 a.m.

The oil prices They are trading lower this Thursday, continuing with the losses registered in large part due to the fall in crude oil inventories in the United States as well as the suspicion that Porcelain is trying to replenish its strategic reserves of crude with cheap russian oil.

At 7:35 am (Mexico City time), the contract for June United States WTI fell 2.14% to start with a price of 107.24 dollars per barrel, while the North Sea Brent for delivery in July fell 1.32% to start with a value of 107.67 dollars per barrel, according to data from Bloomberg.

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China could import Russian crude

According to some reports, Beijing is strengthening its energy ties with Moscow just as Europe works to ban imports because of the invasion in Ukraine.

The crude would be used to fill the strategic oil reserves from China and talks are taking place at the government level with little direct involvement from oil companies, an anonymous source said.

The prices of this raw material have recovered this year after Russia’s invasion of its smaller neighbour, but the price of its own crude has slumped as buyers walk away to avoid damaging their reputations or being embroiled in financial penalties.

Similarly, the Asian country continues to struggle to contain a wave of Covid-19 infections. Although the financial center of Shanghai has started to emerge from a punishing lockdown, there have been new outbreaks in other cities and disruptions in Beijing. The country is the world’s largest oil importer.

At the same time, United States and United Kingdom they took steps to ban imports of Russian crude to punish and isolate Moscow; while the European Union tries to adopt a similar embargo for the bloc, but has run into opposition from Hungary.

“We don’t see a lasting shortage” of oil as other production, including the US shale boom, will top up supply, said Norbert Ruecker, an analyst at Julius Baer Group Ltd. in Zurich. “The lost Russian oil will be compensated by other sources.”

raw latin

US imports of Latin American crude also rose in April to 1.34 million bpd, their highest level in six months. purchases at Argentina rose to a four-year high, while imports from Colombia reached a ceiling since September 2020.

the president of by hawaiiEric Wright said oil from North and South America met Hawaii’s crude processing requirements. Historically, the company had sourced 20-25% of its oil from Russia.

Around 1.8 million barrels of Colombian oil were supplied to processors, including refineries Delaware City of PBF Energy and St Charles de Valero.

Colombia said last week that it could increase oil exports to the United States by 40,000 bpd At the end of the year.

You can also read: Oil closes lower, with surprise drop in US crude inventories

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