Oil Prices Are Rising on Renewed Optimism Over Chinese Demand

Oil prices were rising on Tuesday morning, even though Israel’s retaliation against Iran is yet to materialize. Hopes of a recovery in Chinese demand for crude have been pushing prices higher, with ICE Brent trading at over $75 per barrel. In the coming week, a combination of geopolitics and new macroeconomic data will likely decide where crude goes next.

Amin Nasser, the top executive of Saudi Aramco (TADAWUL:2222), reiterated his belief in the strength of the Chinese market, saying Aramco still wants to increase its liquids-to-chemicals capacity to 4 million b/d, with a focus on China, OilPrice.com reports.

Canada’s largest oil producer Canadian Natural Resources (TSO:CNQ) has reportedly taken over the 20-year term contract of PetroChina to ship oil via the 590,000 b/d TMX pipeline, increasing its total allocation by about 75% to 164,000 b/d.

French energy firm TotalEnergies (NYSE:TTE) predicted that the next wave of LNG supply would only come online from 2027, later than the earlier forecast of 2025, due to project delays, including its very own Papua LNG project.

Despite a bearish outlook on global oil demand in general, the International Energy Agency expects Southeast Asia’s consumption to increase from 5 million b/d to 7 million b/d by 2050, second only to India in contributing to global energy growth.

Venezuela’s President Nicolas Maduro arrested Pedro Tellechea, the former oil minister of the country, after an ’exhaustive probe’ for serious crimes against the country’s highest interests.

The government of Sudan expressed its readiness to resume exports of South Sudan’s heavy sweet Dar Blend crude, shut in since February 2024 after clashes between government forces and the RSF militias damaged and ruptured the 100,000 b/d Petrodar pipeline.

India’s Hindustan Petroleum (NSE:HINDPETRO) is reportedly in the market to buy the first-ever cargo for its soon-to-be-commissioned 5 mtpa capacity LNG import terminal in Chhara, western India, as previous attempts to launch it earlier failed due to bad weather.

Brazil’s National Federation of Dockworkers, Repair Workers, and Port Security launched a nationwide strike to protest against recent changes to the country’s labor law, delaying operations at both export and import terminals.

Darren Woods, the CEO of US oil major ExxonMobil (NYSE:XOM), stated that the company would scrapped its flagship Baytown hydrogen and ammonia plant in Texas is US federal hydrogen tax credits are not implemented in a technology-neutral way.

As China’s refinery runs posted the sixth consecutive year-on-year decline, averaging 14.29 million b/d, the Asian nation’s refiners have started to build inventory as the pace of imports and domestic production exceeded demand by 930,000 b/d.

Amidst continuously increasing Argentinian oil production from its shale Vaca Muerta play, the country’s leading producer YPF (NYSE:YPF) completed a 160,000 b/d pipeline to Chile that would feed ENAP’s Bio Bio refinery on the Pacific Coast with light crude.

Electricity supply across all of Cuba has been heavily restricted after the island country entered its third day of widespread blackouts, as Tropical Storm Oscar damaged power lines and lowered generation capacity to just 700 MW, a quarter of a day’s demand.

Hybrids surpassed petrol-powered automobiles in EU new car sales for the first time on record last month, accounting for 32.8% of the 809,163 vehicles sold in September, benefitting from a 6% year-over-year decline in total registrations.