*China Only Fulfilled 5% of Promised US Energy Purchases
Under the terms of the China-US trade deal agreed last year China agreed to purchase some $25.3 billion worth of American oil products. Halfway through 2020 and they have only completed 5% of that target as the relationship between the two countries sours.
China imported only 45,603 barrels per day of U.S. oil in the first half of 2020 compared with 85,453 bpd in the same period in 2019. LNG import volumes from the United States in the first half of 2020 compared to 2019, to 878,754 tonnes according to Reuters. With less then optimum economic conditions, it seems highly likely that China will undershoot on its 2020 targets.
*Russia Raising Oil Production
Russia is set to increase its oil and gas condensate production from 9.37 million bpd to 9.8 million in August. With OPEC relaxing its strict production cut agreement by 2 million bpd, Russia has committed to increase its crude oil production by 400,000 bpd as part of this amended agreement.
*Hedge Funds Turn Less Bullish on Oil
According the Reuters money managers sold the equivalent of 40 million bbls of the major oil contracts in the last week. Managers sold both crude (-36 million barrels) and refined products (-5 million barrels) as darkening clouds over the virus situation and concerns over the world’s economic recovery weighed. There were net sales of Brent (-21 million barrels), NYMEX and ICE WTI (-15 million), U.S. gasoline (-2 million) and European gasoil (-5 million), with small buying only in U.S. diesel (+3 million).
*BP To Cut Dividend
The oil giant will cut its dividend for the first time since 2010 after its business was hard hit by the collapse in demand due to the virus lockdowns. The company reported a net loss of $6.68 billion for Q2, down from a $2.81 billion profit last year. It has cut its dividend to 5.25 cents a share.