MNI Commodity Analysis: Commodity Markets Await Meaningful Signs of China Stimulus

• Chinese crude imports have showed signs of weakness, but the market overall still remains bullish China this year. It awaits signs of meaningful stimulus measures to help an ailing economic backdrop as it returns from last year’s lockdowns, a move that would likely provide crude another boost.
• The upcoming Chinese fuel export quota is expected to be 10mn tons in the imminent third release, with gasoline exports from the country set to jump in August while planned diesel and jet fuel exports slip back.
• Chinese refineries returning from maintenance are supporting runs but it is not clear if refiners will return to buy up more crude imports or tap into buoyant domestic stockpiles built up at cheaper prices. Russian production cuts are limiting discounted crude availability and tightening discounts. Higher fuel oil imports are also arriving at the expense of crude.
• Peak summer demand has supported gasoline and jet, with further likely to run before peaking demand, but sluggish economic indicators show a weak economic background weighing on diesel as manufacturing and construction lag.

MNI Commodity Analysis - Commodity Markets Await Meaningful Signs of China Stimulus.pdf