China's Oil Export Ban Sends Prices Soaring

Oil prices surged more than $3 on Thursday after China suspended exports of oil products to regions beyond Hong Kong and Macau until further notice. This move has tightened fuel markets already coping with global supply shortages.

The December Brent crude futures contract traded at $101.20 per barrel, up 3.2% from Wednesday's close. US West Texas Intermediate crude futures were up $1.58, or 1.8%, at $92 a barrel.

UBS analyst Giovanni Staunovo noted that the Chinese export ban suggests concerns about domestic product availability, but it remains to be seen whether the measures will support higher crude imports after recent drawdowns in Chinese crude and fuel stocks.

Global diesel inventories were already tight due to Russia's ban on exports through October. The impact of China's fuel export restrictions is unlikely to be as large as the loss of Russian and Middle Eastern refined oil product exports, but it adds another source of stress on global fuel markets.