Skip to main content

Advertisement

Advertisement

Business

China's CNOOC makes rare diesel imports, trading sources say

China's CNOOC makes rare diesel imports, trading sources say

FILE PHOTO: The company logo of China National Offshore Oil Corporation (CNOOC) is displayed at a news conference on the company's annual results in Hong Kong, China March 24, 2016. REUTERS/Bobby Yip/File Photo

SINGAPORE : China's state-run CNOOC has booked two diesel shipments totalling about 50,000 tonnes for early November delivery into south China, a rare purchase spurred by a strong domestic diesel market, several trading sources said on Friday.

China has been a net diesel exporter in recent years but a reduction in domestic refinery throughput since June has tightened supplies and led to a rally in wholesale prices of the main transportation and industrial fuel.

The government's clampdown on light cycle oil, a blending component for diesel, by imposing a hefty tax on imports also cut into supplies.

"Very strong domestic diesel prices have created a window to bring in imported diesel," said one source.

A widespread power curb as well as soaring natural gas prices have also lent support to diesel, as some industrial and commercial consumers shifted to standalone diesel generators and truck fleets switched to more diesel use from natural gas.

Wholesale diesel prices have soared nearly 60per cent since September to around 8,000 yuan (US$1,252) per tonne in east China's Shandong province.

(US$1 = 6.3877 Chinese yuan renminbi)

(Reporting by Chen Aizhu and Koustav Samanta; Editing by Edmund Blair)

Source: Reuters

Advertisement

Also worth reading

Advertisement