Chinaoil Is Shaking Up the Oil Trading Market
While everyone has been watching what is going on with President Donald Trump and the United States, China has been shaking things up in the oil industry. Investors in the country have been making big moves that have the price of Middle East crudes inching upwards.
Investing Strategy for Chinaoil
It is interesting to note that the activity by China National United Oil Co. happened just as the region was starting to notice a dip in supply as a result of the OPEC production cut agreement. Chinaoil invested in 7 million barrels of crude for March from the Middle East. This is part of the investing strategy aimed at buying into the fuel oil in higher quantities to combat rising costs.
China’s Purchase Affects World Pricing
The influx of oil into China is welcome news for crudes all over the world because even though the at least 7 million barrels purchased for March were from the Middle East, the prices of crudes from other regions are also going up. For March delivery, S&P Global Platts notes that Chinaoil purchased 339 of the 346 partial cargoes. The company also purchased full cargoes of Qatar’s Al-Shaheen crude and Abu Dhabi’s Upper Zakum oil.
Investors Should Be Cautious
As the price of crude oil futures increase, investors should be cautious, especially those who aren’t planning on holding on to the investments for the long term. World events – including turmoil coming out of the United States because of President Trump’s executive actions, like the Muslim travel band — are going to keep the market volatile for the foreseeable future.
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