China Halts Fuel Exports as Crude Oil Prices Rally

Crude Oil prices rallied on Thursday after China's refiners halted fuel exports to everywhere except Hong Kong and Macau, citing a drop in domestic fuel stocks.

The decision by China, which has the largest refining capacity in the world but usually exports less fuel than India or South Korea, sent shockwaves through the market. Asian diesel margins have reached their highest levels in a week, prompting refiners to run harder and rebuilding China's own fuel stocks with Crude Oil.

The US also reported an increase in Crude Oil stocks, sitting 2% above their five-year average, while distillate inventories fell 14% below the same benchmark. A US diesel export ban could cut domestic refinery runs by as much as 12%, and the administration is weighing voluntary export limits instead.