Oil Prices Surge on China Export Ban, Global Diesel Market Under Pressure
Oil prices surged by around 2% on Thursday after China suspended oil products exports to regions beyond Hong Kong and Macau. This move, which will tighten fuel markets already coping with supply shortages globally, has sent shockwaves through the industry.
The front-month December Brent crude futures contract traded at US$100.09 per barrel at 4:29 a.m. ET, up 2.1% or US$2.06 from Wednesday's close. The November contract expired on Wednesday, settling at US$103.50 per barrel, marking a monthly gain of around 14% in September for the front-month contract.
UBS analyst Giovanni Staunovo said that the Chinese export ban suggests concerns about domestic product availability. He noted that it remains to be seen whether the measures will support higher crude imports after recent drawdowns in Chinese crude and fuel stocks.
The global diesel market is already under pressure due to falling refining capacity, linked to attacks in the Middle East and Ukraine. The Trump administration has told Germany and France to draw down emergency diesel inventories or face a potential US diesel export ban.