MBCC Trading Highlights 23rd November'22 - China knew about Russian Oil cap for months, do you not think they have stocked up in advance?

Today we take a deep look at all this talk about the Russian Oil price cap and the impact it can have on Oil prices and supply…

We wanted to put some perspective on it. This cap if it gets passed at all, has been known for months. China has been buying ahead of this to plan and budget for this. Ahead of the price cap, Russian seaborne fuel exports soared to the highest since at least 2017 as the nation’s refiners rushed to do deals before EU restrictions on imports and shipping come into force. The nation’s average daily exports of oil products from Nov. 1 to 10 jumped 22% from the prior month to around 3.17 million barrels, according to estimates from data and analytics firm Kpler.

China is way too smart to not be in a good position prior to any shortage, if at all. They planned well in advance and bought Cheap Russian crude at $30/bbl. or more of a discount. Both China and India have, in turn, become major sources of Russian oil to Europe, only instead of calling it Russian oil they sell it as China and Indian oil. This is the problem with these futile price caps, as they are nothing other optics to boost votes as the population suffers the most. In essences Europe has been getting the same Oil but just paying more for it, go figure!

Today we look at how q4 Oil demand is shaping up to be, weather will become important, but we look at the demand/supply balance and what if anything OPEC+ can do. It is all connected. The Fed FOMC, Bond markets, Dollar, China, and US Gas and LNG.

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