Chinese Power Demand Is Set To Soar

1. A Flotilla of US Oil Is Moving Toward Asia

– Deliveries of US crude to Asia are set to reach an all-time high this month, soaring to 1.8 million b/d as the relative discount of WTI to other global benchmarks makes American barrels increasingly profitable.

– As recently as a couple of days ago WTI still traded at a 9 per barrel discount to Brent and a 6 per barrel discount to the Asian benchmark Dubai, with South Korea, China, and India all joining the buying spree.

– South Korea will remain the biggest buyer of US crude regionally, importing a record 620,000 b/d in November, while China will receive the highest volume since December 2020 (approximately 450,000 b/d).

– Chinese buying is particularly noteworthy as it comes after the huge 15-million-ton product export quota allocated in September, driving refinery runs much higher since.

2. China Woes Sink Bright Prospects for Iron Ore

– Iron ore has become one of the poorest performing commodities this year, writes Bloomberg, with Asian futures falling for seven straight months already, the worst run on record.

– Still overly dependent on Chinese demand, iron ore futures have dropped to almost $80 per metric ton, a third of what they were at their May 2022 peak.

– China’s Communist Party congress failed to introduce large-scale stimulus measures for the country’s real estate, which combined with anti-pollution curbs and government-mandated steel output…