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China’s Unipec boosts Oman crude sales, caps oil prices despite Saudi cuts

Published

11 months ago

June 12, 2023

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China's Unipec boosts Oman crude sales, caps oil prices despite Saudi cuts

China’s Unipec, the trading arm of top Asian refiner Sinopec (600028.SS), has emerged as a major seller of August-loading Oman crude this month, a move that has helped to cap benchmark prices despite Saudi Arabia’s plans to cut output next month.

Unipec, according to trade sources and data collated by Reuters, has sold 8 million barrels of Oman crude since the start of June on S&P Global’s trading platform, also known as the Platts window and used to assess the Dubai price, benchmark for millions of barrels exported from the Middle East.

It was not immediately clear why Unipec was selling large volumes of Oman crude. Traders and analysts said tepid fuel demand from a slower-than-expected economic recovery has squeezed refining margins in China; plus Unipec and other Chinese refiners have been bringing in more barrels from Russia, West Africa, the United States and Brazil.

Sinopec did not respond to a request for more detail on the sales or the reasons behind them.

Unipec sold the Oman cargoes to Totsa, the trading arm of TotalEnergies (TTEF.PA), PetroChina Hong Kong, Shell (SHEL.L) and Trafigura (TRAFGF.UL), the data collated by Reuters showed.

The unusually large Oman crude sales began on June 1, traders said, just ahead of Saudi Arabia’s surprise June 4 move to cut July output by 1 million barrels per day and as the world’s biggest producer raised its official selling prices.

The trades helped cap spot premiums of benchmark Dubai prices to under $1 a barrel for most of June, Reuters data showed, despite the prospect of tighter Saudi supplies.

Unipec made no such sales in May, and in the last year, it has typically sold less than 2.5 million barrels of Middle Eastern crude over the Platts window each month.

The sales have occurred as June crude deliveries to China are forecast to rise after hitting the third-highest monthly level in May, data from analytics firms Kpler and Vortexa showed.

In addition to a huge influx of Russian oil into China, June imports of U.S. crude are set to hit a record high of 30 million barrels, while more than 32 million barrels of West African crude will reach China, the Kpler and Vortexa data showed.

Unipec in recent months has been among those boosting oil purchases from West Africa, the U.S. and Brazil, traders said.

Strong crude imports and refinery maintenance in the second quarter have also boosted China’s commercial crude inventory to 962 million barrels, the highest since end-2020, said Emma Li, an analyst from data analytic firm Vortexa.

Some 1.22 million barrels-per-day of refining capacity in China were shut for maintenance in May, according to a Reuters calculation. And Chinese state refiners lowered operating rates to about 76% in May from about 77% in April, according to data compiled by Longzhong consultancy.

The run cuts come as China’s refining margins were assessed at about 461 yuan ($64.53) a tonne in May, down 45% from April, Longzhong data showed.

In contrast, the data also showed, margins at independent refineries known as teapots in the oil hub of Shandong province were around 1,136 yuan a tonne as they binged on cheap oil from Russia, Iran and Venezuela.

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Business

Star Entertainment says Hard Rock-led group weighs bid, shares surge

Published

22 hours ago

May 20, 2024

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Star Entertainment says Hard Rock-led group weighs bid, shares surge

Star Entertainment (SGR.AX), opens new tab said on Monday a consortium led by Florida-based Hard Rock Hotels & Casinos is considering a bid for the cash-strapped Australian firm, sending its shares 20% higher.

A potential takeover by entertainment giant Hard Rock would provide a much-needed financial lifeline to Star, which has been plagued by a regulatory inquiry into its flagship Sydney casino operation and an executive exodus.

Star, which had a market value of A$1.29 billion ($863.66 million) as of Monday’s close, said it has been approached by a consortium of investors which includes Hard Rock Hotels & Resorts (Pacific).

The company said it understands Hard Rock Hotels is a local partner of Hard Rock.

Earlier in the day, Star said it had received “inbound interest from a number of external parties” but flagged none of them had yet resulted in “substantive discussions”.

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Business

Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

Published

23 hours ago

May 20, 2024

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Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

U.S.-based restaurant chain Red Lobster has filed for Chapter 11 bankruptcy protection in a Florida court after securing $100 million in financing commitments from its existing lenders, the company said on Sunday.

The company listed its assets and liabilities to be between $1 billion and $10 billion, according to a court filing.

Red Lobster said its restaurants will be open and operate as usual during the bankruptcy proceedings, and plans to reduce its locations as well as pursue a sale of substantially all its assets.

The restaurant chain also said it has entered into a “stalking horse” purchase agreement to sell its business to an entity formed and controlled by its existing term lenders.

“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” said Jonathan Tibus, CEO of Red Lobster.

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Business

BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

Published

23 hours ago

May 20, 2024

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BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

German automaker BMW (BMWG.DE), opens new tab imported at least 8,000 Mini Cooper vehicles into the United States with electronic components from a banned Chinese supplier, a U.S. Senate report released on Monday said.

A report by Senate Finance Committee Chairman Ron Wyden’s staff said BMW imported 8,000 Mini Coopers with parts from a Chinese supplier banned under a 2021 law and that BMW continued to import products with the banned parts until at least April.

BMW Group said in an email it had “taken steps to halt the importation of affected products.”

The company will be conducting a service action to replace the specific parts, adding it “has strict standards and policies regarding employment practices, human rights, and working conditions, which all our direct suppliers must follow.”

Congress in 2021 passed the Uyghur Forced Labor Prevention Act (UFLPA) law to strengthen enforcement of laws to prevent the import of goods from China’s Xinjiang region believed to have been produced with forced labor by members of the country’s Uyghur minority group. China denies the allegations.

“Automakers’ self-policing is clearly not doing the job,” Wyden said, urging the Customs and Border Protection agency to “take a number of specific steps to supercharge enforcement and crack down on companies that fuel the shameful use of forced labor in China.” Customs and Border Protection did not immediately comment.

The report found that Bourns Inc, a California-based auto supplier, had sourced components from Sichuan Jingweida Technology Group (JWD). That Chinese company was added to the UFLPA Entity List in December, which means its products are presumed to be made with forced labor.

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