(Bloomberg) -- An uptick in purchases of Middle Eastern oil by Chinese refiners is helping to support the physical crude market, even as deep-seated concerns remain about the trajectory of the nation’s demand.
Companies including Unipec and PetroChina Co. have boosted spot purchases of September-loading Middle Eastern crude to arrive in September-October, according to traders and analysts. That comes as state refiners ramp up following maintenance, a new private refiner prepares to start operations, and more buying is expected for the nation’s strategic reserves.
China is the world’s largest crude importer — sourcing barrels from right around the globe — and its overall appetite helps to set global prices. As the nation’s economy slows this year amid a persistent property crisis and falling consumer confidence, year-to-date crude inflows have lagged last year’s pace. That backdrop has traders focused on its buying patterns for clues on the outlook.
“Spot purchases are seen to be high, with Chinese oil buying focusing on Middle East volumes this cycle,” said Jianan Sun, analyst at Energy Aspects Ltd.
In the spot market, the pricing of Dubai-linked barrels, such as those from the United Arab Emirates and Qatar, have become cheaper compared with long-haul cargoes that are priced off Brent, attracting more buyers, traders said.
Brent futures — the global crude benchmark — are about 9% higher this year, and last traded just above $83 a barrel.
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