Oil Advances on China’s Order to Secure Supplies at All Costs
(Bloomberg) -- Oil climbed after China was said to order top state-owned energy companies to secure supplies for the approaching winter at all costs.
Futures in New York rose 0.7% on Thursday, erasing earlier losses of as much as 2.3%.
In China, the order came directly from Vice Premier Han Zheng, who supervises the nation’s energy sector and industrial production, and was delivered during an emergency meeting earlier this week with officials from Beijing’s state-owned assets regulator and economic planning agency, according to people familiar with the matter, asking not to be named discussing a private matter.
U.S. crude futures are heading for about a monthly gain of almost 10%, spurred by ongoing supply disruptions in the U.S. Gulf of Mexico and robust demand. Some options traders are even betting prices could reach $200.
Crude supplies probably will be 1.5 million barrels a day shy of demand during the next six months, according to Citigroup Inc. That deficit could widen should soaring natural gas prices spur a shift to petroleum-derived fuels.
Global oil supplies are expected to fall short of demand by 1.2 million barrels a day in October, and by 900,000 the following month, according to an OPEC secretariat document being reviewed by the group’s Joint Technical Committee.
Meanwhile, Wall Street is turning more bullish on oil prices the longer Iran delays a resumption of nuclear talks. Strategists and traders from Goldman Sachs Group Inc. to Citigroup and Vitol Group said the stalling has reduced chances of millions of Iranian barrels returning to global markets this year.
More stories like this are available on bloomberg.com
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