China's Fuel Export Halt Sparks Crude Oil Price Rally
Crude Oil prices turned positive on Thursday as Chinese refiners halted fuel exports, sparking a rally in global markets. The move follows reports that Beijing has stopped selling fuel abroad, with China's state-owned refiner cancelling several October gasoline and jet fuel cargoes.
The shortage of diesel, gasoline, and jet fuel is driving up prices, not the barrels used to make them. In Asia, diesel now sells for around $75 a barrel more than the Crude Oil it's made from, roughly what a whole barrel of Crude Oil fetched in early August.
US distillate inventories fell 2.3 million barrels over the week to September 25 and are currently 14% below their five-year average. Meanwhile, US Crude Oil stocks rose 922K barrels during the same period and sit 2% above their five-year average.