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Oil Crisis Just Got Real: Sinopec (Read China) Cuts Off Oil Exports

Tyler Durden's picture


As if a dollar in freefall was not enough, surging oil is about to hit the turbo boost, decimating what is left of the US (and global) consumer. Xinhua, via Energy Daily, brings this stunner: " Chinese oil giant Sinopec has stopped exporting oil products to maintain domestic supplies amid disruption concerns caused by Middle East unrest and Japan's earthquake, a report said Wednesday. The state-run Xinhua news agency did not say how long the suspension would last but it reported that the firm had said it also would take steps to step up output "to maintain domestic market supplies of refined oil products". Oh but don't worry, those good Saudi folks are seeing a massive drop in demand... for their Kool aid perhaps. "Sinopec would ensure supplies met  the "basic needs" of the southern Chinese special regions of Hong Kong and Macao, but they also should expect an unspecified drop in supply, Xinhua quoted an unnamed company official as saying." Now... does anyone remember the 1970s?

The report said Sinopec has raised output of refined oil products this year, with its first-quarter production reaching 31.55 million tonnes, an increase of 6.2 percent from the same period last year.

Sinopec last month said its 2010 net profit rose nearly 14 percent on higher oil prices and strong domestic demand for refined oil and chemical products.

It reported a net profit of 71.8 billion yuan ($11 billion).

The Beijing-based company attributed the result to China's rapid economic growth, robust oil demand and "the increase in the price of crude oil, oil products and petrochemical products."

It had said at the time that it would continue to "expand markets" in China and overseas this year, while intensifying its exploration efforts in the country's western regions.

Oil prices have surged on supply concerns as governments in the oil-rich Middle East and North Africa are hit by popular uprisings, while the Japan quake and resulting nuclear crisis led the country to seek other forms of energy other than atomic.

And another perspective on how China just gave Geithner and his inflation exporting dreams the biggest, baddest middle finger, from Global Times:

China Petrochemical Corp (Sinopec Group), Asia's largest oil refiner by capacity, said Tuesday it had halted refined oil exports, except those to Hong Kong and Macao, in order to bolster domestic supply. Analysts said the move would help prepare for a possible domestic fuel shortage later this year.
Due to the turmoil in the Middle East and the earthquake in Japan, Sinopec is facing pressure just to meet demand at home, the company said.

The company will keep its refineries running at full capacity, but will cut petrochemical production and reduce the workload at its chemical plant installations to boost the domestic supply of refined oil, it said. It plans to produce 10.54 million tons of refined oil products in April.
The company did not say how much refined oil it would hold back from the international market.

"With the weather getting warmer, more cars hitting the road and increased demand from the construction, industrial and logistic sectors, the consumption of refined oil is expected to surge in April," said Wang Shunzeng, secretary-general of Beijing Petrol Circulation Industry Association.
Meanwhile, due to inflation and the rising price of crude oil, many private refineries have reduced production, making it necessary for State refiners to step in to fill the gap, analysts said. 

China's refined oil inventories fell last month after hitting record highs at the end of February, the National Development and Reform Commission (NDRC) said Tuesday.

The country's apparent refined oil use in March reached a record high of 21.73 million tons, the NDRC said.

"The inventory of refined oil is actually still at the normal level. Sinopec's move suggested that it is making early preparations for peak demand in summer and a possible fuel shortage later this year," Zhong Jian, chief analyst with C1 Energy, told the Global Times.

The country had a shortage of fuels last year, especially a diesel shortfall in the fourth quarter when electricity cuts due to power rationing caused factories to use backup diesel generators to provide power, thus pushing up diesel demand.

Zhong said that China's crude oil processing capability would rise by 17 million tons this year, but this figure is lower than for the two previous years. He also said there would be a 4-million-ton shortage of diesel oil this year

Translation: Shit just got real, and is about to manifest itself in limit ups in both regular, and black gold.


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Thu, 04/21/2011 - 02:06 | Link to Comment tickhound
tickhound's picture

"Now you's can't leave"

Thu, 04/21/2011 - 03:01 | Link to Comment SilverRhino
SilverRhino's picture

China is preparing for war.

Thu, 04/21/2011 - 03:08 | Link to Comment Michael
Michael's picture

Lindsey Williams says the elites plan to drive oil over $200 a barrel by whatever means necessary and double cross the Arabs by defaulting on the treasury debt they hold. Book it, it will happen period.!

Thu, 04/21/2011 - 07:23 | Link to Comment spiral_eyes
spiral_eyes's picture

the one problem i can find with lindsey williams' thesis is that i don't believe in the extent of north american oil reserves that he talks about. and even if he's right, bringing the capacity online will be a long and black swan-prone process. so if the kissinger people wanna try and default on treasuries, i think america will lose a lot of energy and industrial capacity, hastening hyperinflation.

Thu, 04/21/2011 - 09:06 | Link to Comment oklaboy
oklaboy's picture

I concur, our Industrial and manufacturing base is crumling, and turning it around will be lengthy and painful

Thu, 04/21/2011 - 11:06 | Link to Comment Sweet Chicken
Sweet Chicken's picture

Not if there truly is a WWIII in the making.

Thu, 04/21/2011 - 13:20 | Link to Comment Ahmeexnal
Ahmeexnal's picture

US oil reserves are greater than estimated.

Ellis Wyatt is obtaining shale oil cheaper than arab oil with his new technology.

But...he's on strike.

Thu, 04/21/2011 - 06:23 | Link to Comment Popo
Popo's picture

China isn't doing anything of the sort.  This whole post is a non-story.  China is a massive net IMPORTER of oil.   Saying that China is cutting off exports of oil is like saying Finland is cutting off its exports of coconuts.  Please.  

Let's get back to the collapse of capitalism and the onset of global chaos that's actually underway....

Thu, 04/21/2011 - 06:26 | Link to Comment True.North
True.North's picture


Thu, 04/21/2011 - 06:29 | Link to Comment Dental Floss Tycoon
Dental Floss Tycoon's picture


You nailed it.  Viet Nam and Indonesia will be squeezed but that's about it.

Thu, 04/21/2011 - 06:38 | Link to Comment Popo
Popo's picture

The only thing of relevance one can infer from this story is that China predicts oil prices to go up (no big shocker there), and that they are increasing reserves to offset future volatility.    Increasing supplies is just prudent energy policy meant to preserve economic stability, not a shot across the bow.

One could just as easily commend China for this move, as it insures greater supply chain integrity in the face of potential global economic instability/oil supply shocks.  ...But that wouldn't have the same sensationalist fear factor, as "oh noes, shit just got real".

With all of the global economic/political chaos/collapse that's *actually* happening, why does ZH have to jump the shark like this?

Thu, 04/21/2011 - 07:09 | Link to Comment youngman
youngman's picture

I think what they are doing is controlling a corner of the market...China has been investing in oil companies...fields ..and countries..what they are saying is that any oil they are producing around the world goes to them....not the rest of the world...sort of like silver going from registered to Eligible......its not a fungible product anymore....they are trying to corner the world market in every commodity...

Thu, 04/21/2011 - 07:59 | Link to Comment EvlTheCat
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It is an inevitable fact when you have multiple personalities at the helm.  Thanks for the sanity check!

Thu, 04/21/2011 - 07:59 | Link to Comment dearth vader
dearth vader's picture

Sorry dude, you're mixing up 'oil' and 'refined oil products'.

Fri, 04/22/2011 - 08:05 | Link to Comment Coast Watcher
Coast Watcher's picture

Read the article again. China is cutting its exports of *refined* product, not crude. My guess would be as a domestic buffer against future price increases.

Thu, 04/21/2011 - 06:19 | Link to Comment topcallingtroll
topcallingtroll's picture

Dude, did you quit taking your medicines again?

Thu, 04/21/2011 - 10:55 | Link to Comment immalittlepunchy
immalittlepunchy's picture

classic scene. love that line.

Fri, 04/22/2011 - 13:33 | Link to Comment onarga74
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I think that's youns and it couldn't have an apostrophe cause the word has over 4 letters

Thu, 04/21/2011 - 02:13 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Demand for sea water is not only high in Japan, but in the House of Saud too.

Saudi Arabia did not make up for Libyan oil:

Thu, 04/21/2011 - 04:05 | Link to Comment Pondmaster
Pondmaster's picture

Libyan = sweet crude

Saudi - sour watered down sludge

Thu, 04/21/2011 - 04:27 | Link to Comment Urban Redneck
Urban Redneck's picture

The real sludge comes from the Orinoco belt and the Canadian tar sands to feed the US markets. 

Sinopec & CNOOC production is still offline in Libya as far as I know, and the firms have also been making investments in Nigerian E&P (land o' bonny light), and just about anywhere else they can find oil.   

Thu, 04/21/2011 - 08:37 | Link to Comment Chuck Walla
Chuck Walla's picture

The Chinese get it and are moving heaven and earth to ensure their supply of oil. Contrast to the idiots running the US asylum. They do everything possible to kill supply until it pisses the voters off. The Child in Chief apparently needs one more term to complete the irreparable damage. Cutting supply also satisfies the Fabian impetus to eugenincs, starvation can rid the world of a lot of undesirables. The new Nazis command the DNC. The world is only fed by the supply of cheap oil.

Thu, 04/21/2011 - 02:16 | Link to Comment OldPhart
OldPhart's picture

Owwie, this is going to leave a mark.

Thu, 04/21/2011 - 02:22 | Link to Comment buzzsaw99
buzzsaw99's picture

This move is meant to control fuel prices and trucker strikes. China is a net importer of oil. They better subsidise too.

Thu, 04/21/2011 - 02:24 | Link to Comment litoralkey
litoralkey's picture

Three day old news that crossed the Bloomberg ticker for several hours.

Sinopec is exporting diesel while subisidizing diesel internally.

Sinopec had to cut exports last Nov/Dec for same reasons.

looks like the value of the exports has lost utility value versus the placating of the internal political situation.

Since Sinopec is subsidizing the only interesting point is which princelings or state owned enterprises get the newly available supplies at below market prices?

If Sinpec isn't breaking delivery contracts I don't see this as too noteworthy outside of the small increase in demand due to inefficiencies of subsidies.


Thu, 04/21/2011 - 03:03 | Link to Comment SilverRhino
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Could also be a move to placate the truckers strike going on right now as well.

Thu, 04/21/2011 - 08:48 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

Bingo!  the commie party "leadership" cuts off its "partners" in trading oil &tc for yuan and non-dollars while telling its truckers to hammer down their rubber duckies:  we're gonna have us a con-voy!

slewie wants the "i remember the 70's" hat to go with his "$50 BiCHeZ" T shirt!

Thu, 04/21/2011 - 03:01 | Link to Comment SilverRhino
SilverRhino's picture

Could also be a move to placate the truckers strike going on right now as well.

Thu, 04/21/2011 - 05:43 | Link to Comment tonyw
tonyw's picture

China has been a net oil importer since the mid 90s, here's a good site that allows you to easily see any country's production and consumption for energy sources (coal, oil, gas, nuclear & hydro):

Thu, 04/21/2011 - 02:33 | Link to Comment A Man without Q...
A Man without Qualities's picture

Well, people will just have to stay home and watch Youtube clips of where they want to drive on their iPads...

Thu, 04/21/2011 - 04:59 | Link to Comment Sudden Debt
Sudden Debt's picture

They do this because it's a easy way to subsidise their domestic oil and prevent a rioting population.

It sure looks like the chinese inflation still has some room to move up :)






Thu, 04/21/2011 - 06:06 | Link to Comment Antarctico
Antarctico's picture


I must still have sleep in my eyes because I just read this as FUCK SAFETY BALLS! which is not accurate, but is funnier. ;D

Thu, 04/21/2011 - 07:33 | Link to Comment FreeMoney Bernie
FreeMoney Bernie's picture

Fuck safety anything have you seen the price of cocomuts since Finland quit exporting them?

Thu, 04/21/2011 - 02:45 | Link to Comment Peak Everything
Peak Everything's picture

This is bullshit reporting. How many fucking barrels of oil products have they historically exported?. There is no way to tell from this article what the magnitude of the possible problem is.

Thu, 04/21/2011 - 03:39 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture


China exports about half a million Barrels a day, less than 1%. However Libya exports 1.5 Million Barrels a day and look at how much the market freaked out over that tits up.

Thu, 04/21/2011 - 03:54 | Link to Comment jomama
jomama's picture

meh, that's a drop in the bucket.  figuratively speaking, of course.

Fri, 04/22/2011 - 08:05 | Link to Comment Coast Watcher
Coast Watcher's picture

"Drop in the bucket"? More like the straw that breaks the camel's back.

Thu, 04/21/2011 - 07:35 | Link to Comment FreeMoney Bernie
FreeMoney Bernie's picture

somebody ask the same question above about Finland and coconuts and now Fiji cannot afford the price of coconuts

Thu, 04/21/2011 - 03:30 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture


This is good news, right? Bloomberg proves again that the Broken Window is the way forward.

Bennie can print the oil futures now with the new Apple applications, everything is under control. Sit back and relax folks...


Thu, 04/21/2011 - 03:32 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

Yeah, I remember the 70's but, there is a Kink in the things ''just got real''. Shit has hit the fan and already flown off. This is the Shit in your face moment.


Thu, 04/21/2011 - 04:27 | Link to Comment UnBearorBull
UnBearorBull's picture

Just read your link. Lot going on that could get weird.

How reliable is that source?

Thu, 04/21/2011 - 06:22 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...about as reliable as the dollar. All kidding aside, who would pay for Paki Rats, that store your reported (2?) nukes, to fight the nuke building Iranians that wan't to blow you up, after you just obtained $60+ billion worth of American arms? It's not as if there is any counter intelligence going on or any pre emptive calls for a Nuclear NonPROLIFEration Nobel Prize manwavers from the likes of Rose Mary's Baby (AKA Hussein of Babylon) and the lunatic fringe.  I see a Muslim on Muslim war (already on) and a major event. Yes, a quick fearfull slaughter large enough to get all the nations and Israel at the peace table. A false peace that lasts about half as long as the agreement looks about right. An event may happen just in time to affect the 2012 election and the end of QE2, as Comet Elenin is close in September, around the second week, like the 11th possibly eh?

Speculation...  watch.

Thu, 04/21/2011 - 05:06 | Link to Comment Sudden Debt
Sudden Debt's picture

Abdullah will soon be handled. That's pretty much clear richt now.




Thu, 04/21/2011 - 06:20 | Link to Comment topcallingtroll
topcallingtroll's picture

That'll show him.
Teach him a lesson he wont soon forget.

Thu, 04/21/2011 - 07:37 | Link to Comment FreeMoney Bernie
FreeMoney Bernie's picture

that is not allowed in my country without a vail or is it vale or maybe veil. Oh shit just leave by ass alone.

Thu, 04/21/2011 - 05:20 | Link to Comment Youri Carma
Youri Carma's picture
The "miserable" Arab found out about the US trying to stick a knive in their backs. They wised up and now try to fight the US by getting close to Pakistan and China.


Webster Tarpley: Revolutions or CIA Putsch Campaign in the Middle East? - Alex Jones Tv 1/2

Webster Tarpley: Revolutions or CIA Putsch Campaign in the Middle East? - Alex Jones Tv 2/2

'Libyan civilians, new WMD for NATO'

Thu, 04/21/2011 - 15:45 | Link to Comment Money Squid
Money Squid's picture

Tarpley used to post frequently here, not as an official contributor, but as member. Its been a while since I saw him post a I forgot his screen name. For thest types of issues I always appreciate his perspective.

Fri, 04/22/2011 - 08:15 | Link to Comment Coast Watcher
Coast Watcher's picture

I usually treat Debka with some suspicion, since it's a long been suspected as a Mossad disinformation source. This report makes a certain amount of sense, if you strip away the over-the-top alarmism. Iran has been meddling in Arabian Peninsula politics lately, so it's logical that SA and others would react with some vigor. Given Iran's military strength, though, SA should be prepared for serious losses in its oil infrastructure if it goes forward with a militry confrontation.


Thu, 04/21/2011 - 03:49 | Link to Comment Gyro Gearloose
Gyro Gearloose's picture

I remember the 1970s very well.  Very long lines of cars backed up on the streets at all the gas stations with your license plate number determining whether you could get gas or not.  Every other day was the only time you could fill up (odd & even#s) unless ya got creative and "borrowed" someone else's plate and 20 to 40 minute waits to get to the pump.

Thu, 04/21/2011 - 03:52 | Link to Comment jomama
jomama's picture

i'm curious what their impact on the us economy would be in terms of a percentage of daily usage?

Thu, 04/21/2011 - 03:55 | Link to Comment smeagol
smeagol's picture
Putin Delivers Big, Mocking Speech Of US Debt, Trade Balance, And Out Of Control Fed

Russian Prime minister Vladimir Putin has called U.S. monetary policy "hooliganism" in a speech before his country's parliament.

Putin also criticized the U.S. debt situation, and said Russia could not conduct its policy similarly.


"We see that everything is not so good for our friends in the States," Putin told lawmakers in the lower house of parliament. "Look at their trade balance, their debt, and budget. They turn on the printing press and flood the world with dollars," he said.

Thu, 04/21/2011 - 04:37 | Link to Comment SME MOFO
SME MOFO's picture

Do they have some kind of naval base we can sneak attack?

Thu, 04/21/2011 - 04:50 | Link to Comment zhandax
zhandax's picture

What better place to insert this moldy oldy from 1978....



Thu, 04/21/2011 - 08:02 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

Nize ...

Thu, 04/21/2011 - 04:50 | Link to Comment Youri Carma
Youri Carma's picture

"does anyone remember the 1970s?"

Yes, I do and back then, as a child, I loved the idea of skating on the highway.

Thu, 04/21/2011 - 05:01 | Link to Comment Sudden Debt
Sudden Debt's picture

My dad was still doing test runs in those days to construct me.


Thu, 04/21/2011 - 04:52 | Link to Comment Mongo
Mongo's picture

iPad for everyone... BITCHASS!

Thu, 04/21/2011 - 05:25 | Link to Comment CrowWarrior
CrowWarrior's picture

Hey everyone, this is my first post, please be gentle. Unless you don't want to of course lol. Anyways, from my perspective, which I admit is quite limited, it would seem to be likely that Sinopec will renege on export contracts. Of course this move is good for China, and while they might not export much, this move could be quite bad for the rest of us. Remember they are dealing with refined product and not straight from the ground as it were. The other customers will be looking for another "hose" to drink from, creating a fair bit more competition as there is only so many "hoses" refining this stuff. Pumping more out of the ground doesn't do anything to the speed of refining it. More demand, less product, higher prices. This will hurt the American dollar even more, and indeed lead to even less disposable income hurting the tax base as well as other areas of the economy and what not.

The question is how bad will it be? Well by itself perhaps not much, but factor in everything else going on, and it is clear a move of this nature will have quite the profound effect. Well ok, clear to me, and indeed I could always be wrong. From what I can tell it seems as though China is also shorting the dollar, an indicator they are ready to dump their holdings en masse soon. Any move by the Fed to create another TARP or QE9000+ will likely push the Chinese into outright dumping to protect their interests. With the current rate of decay, I would think around September, though honestly just about anytime is just as likely as another.

The US should go under before the UN votes on Palestine, which is tentatively scheduled for September.

Thu, 04/21/2011 - 06:17 | Link to Comment topcallingtroll
topcallingtroll's picture

Welcome to fight club.

If this is your first day in fight club you are required to fight.

China still subsidizes fuel. This reduction in exports is really more a sign of china desperation than anger.

They have a huge number of inefficient businesses that are going to be hit hard with rising oil or a rising yuan. This shows part of the tribute being paid to the usa. They subsidize energy in china and pass on the savings to the usa in terms of lower product prices than would be available had china not subsidized oil products.

China is still our bitch. They dont like it, but this is more like the mouse that roared versus a true shot across the bow.

Thu, 04/21/2011 - 09:28 | Link to Comment CrowWarrior
CrowWarrior's picture

Lol, fair enough. I wouldn't say China is anyones bitch. By having lower product prices they undercut American businesses. They get your money when they otherwise wouldn't. By doing this China is placing themselves to be at the top of the food chain. America needs China to continue buying the dollar. However China can spend their money anywhere they feel like. They spend it on the dollar, because they get something out of it. They got the secrets to stealth tech in exchange for 50 some billion in debt relief in May 2009, they get to put incredible pressure on the administration for whatever they feel like, and God only knows what else they have actually received.

I concede China being desperate, but when you're desperate you are probably also a little pissed off. It is true this action is more like a mouse roaring in and of itself, but it will interact with other forces out there, thus being magnified. The final extent of which I do not know. Something like this is a warning indicator. China is prepared for, and willing to do a true shot across bow. All it will take is a wrong step by chairsatan, which will happen eventually.

Thu, 04/21/2011 - 13:48 | Link to Comment r101958
r101958's picture

well-stated Crow. welcome.

Thu, 04/21/2011 - 06:09 | Link to Comment experimentals
experimentals's picture

thanks for that link zhandax1

Thu, 04/21/2011 - 06:36 | Link to Comment Dejean Splicer
Dejean Splicer's picture

ZH asian Fears.

What percentage of world output does China represent?

Thu, 04/21/2011 - 06:59 | Link to Comment Steroid
Steroid's picture

And what about Nigaz when peace breaks out in Nigeria? :)

Thu, 04/21/2011 - 07:19 | Link to Comment Itsalie
Itsalie's picture

People especially the MSM, have become too cavalier on the social impact of China's inflation. You hear the FT, Economist, WSJ etc commenting that 2011 is not even close to 2008 inflation levels. First, in 2008, China could order the local government's to build more towns and absorb workers loking for sideline to make up their pay, now China has to reign in local projects. Second, in 2008, China never had to resort to threats to force Carrefour or Walmart to hold prices, now they are doing it. Third, in 2008, China did not cut fuel subsidies, it simply used interests earned on some of its higher-yielding US treasuries (yea, 5% on 10-year was such a long time ago) to subsidize fuel an food prices. Now they have repeatedly cut fuel subsidies. If you think $4/gal is painful for joe sixpack who earns $500 a week, think of what it means to the average chinese trucker who earns 5 or 10 times less.

Few in the MSM are old enpugh to recall that the 5 years running up to 1989 Tananmen was plagued by high inflation between 7% (1984) to 18% (1989) caused by ultra loose monetary policies (banks lending of course, in case you think they learnt toilet paper printing from uncle sam, think again). There was also a mini-crash in 1987, but China did not have a stock market then. The spectre of 1989 looms larger than ever, especially with Liu Xiaobo and Ai Weiwei's arrest. The CCP knows what is coming, only the MSM and the investment banks touting various risk assets and emerging markets want us to keep whistling past the graveyard. The US debt, Euro banks issues are known problems, China is the big one, watch out for 2012, maybe 2013; five years is the usual sell-by date for "loose monetary policies".

Thu, 04/21/2011 - 07:58 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

Interesting post; thanks for putting things in historical context.

Thu, 04/21/2011 - 07:48 | Link to Comment sudzee
sudzee's picture

Cost of gas is Canada is going thru the roof. Will at some point have to cut off supplies to the US for domestic market and re-direct excess to countries willing to pay in something other than FRN confetti.

Thu, 04/21/2011 - 08:58 | Link to Comment HedgeFundLIVE
HedgeFundLIVE's picture

The main force keeping oil prices so high right now is industrial demand. China for instance, has reportedly had double-digit rate growth in oil demand for over 6 months straight. The good part for most American companies is that they can hedge their costs if they are smart enough, too bad the majority of people can’t:

Thu, 04/21/2011 - 09:02 | Link to Comment Iam_Silverman
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Is Cushing still chock-a-block full?

Thu, 04/21/2011 - 13:53 | Link to Comment r101958
r101958's picture

Cushing is meaningless. Their max is 40 million brls. A little over 2 days supply. They are over stocked simply because they are bottlenecked. Not because there is no demand.

Thu, 04/21/2011 - 10:58 | Link to Comment Is that you Joh...
Is that you John Wayne's picture

Sinopec is complying with the reality that the Chinese government has adopted Zimbabwe's methodology for dealing with inflation: namely legislating it away. The NDRC has pegged fuel/product prices, and as a result private refineries in china (that theoretically aim to make a profit) can no longer sell gasoline / diesel below what it costs them to make it. Their input costs (uh, crude) are priced on the global market. Their outputs (gasoline, diesel, kerosone etc.) are not market priced. Equals negative gross margin. So private refining capacity has shut down, and like all SOEs in China, Sinopec is told to step into the void and use its available refining capacity to provide gasoline/diesel below its costs to the domestic market. Hence Sinopec pulling product from the export market. As a result, crack spreads should continue to widen for Eastern Hemisphere product prices, whihc only exacerbates the high cost of crude for Asia ex-China. A big giant kiss my ass from china to the rest of Asia.

Thu, 04/21/2011 - 17:44 | Link to Comment Carl Jones
Carl Jones's picture

Look, it appears to me that everyone is missing a trick.

We are told that oil prices are high, because of demand. This is not the case. Demand for oil has slumped. This is the reason for stopt the oil coming to market. The Saidi`s are slashing production and only weeks after so say "increasing production".

Now a Chinese company has stopped exports!!

It appears to me that everyone is hell bent on cutting oil prodiction, or limiting supply.

If the price of oil falls too far, Middle East producers will go bust and they will then need to sell their worthless $$$$$$ holdings. China does not need the bad publicity...Amerika is doomed.

I really don`t get it...everyone, even the alternative news media are telling this NWO lie. Have the airline reinstated their axed flights? No! Have you noticed where the Baltic Dry Index is? Yes, its through the floor!!

It is a myth that demand drives the price of oil.

Thu, 04/21/2011 - 20:30 | Link to Comment SmittyinLA
SmittyinLA's picture

thats refined products, not oil, and the last time I checked XOM was over-supplying Japan with refined products  above normal.

I think the primary reason China isn't exporting more refined products has nothing to do with Libya but in fact has everything to do with Chinese petroleum consumers.

Fri, 04/22/2011 - 13:46 | Link to Comment onarga74
onarga74's picture

We just need to get a war goin somewhere.   Last couple of weeks CNN was covering the "events" in Libya.  Now it's "the war in Libya".  John McCain is there now...I'm sure he'll dig up something of mass deception to get us busy makin guns n butter again. 

Give us a break...the CIA could take a couple of pictures of Kladaffy's nose hair to him (taken from space) and he'd instantly take the offer to replace Charlie Sheen for next season.  Wasn't it a little strange that Obama just appeared on tv to tell us that we're gonna attack Libya?  That happens all the time.  Next week Puerto Rico...  Maybe Ben convinced him that the only way to reduce the deficit is to make it bigger.

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