Oil prices fell on Tuesday as China reported a 6.4% drop in exports, marking the sixth consecutive month of decline. The US dollar index also rose, making oil more expensive for foreign currency traders. However, the decision by Saudi Arabia and Russia to extend their voluntary production cuts limited further price decreases. Saudi Arabia implemented an additional output cut of 1 million barrels per day, while Russia reduced exports by over 300,000 barrels per day in November. Oil prices have dropped nearly 20% from September highs due to economic weakness in China and increased oil production in the United States. Traders do not expect the current Middle Eastern hostilities to affect energy supplies. The United States is extracting oil at record levels, increasing supply and bringing down prices. Chinese exports decreased by 6.4% in October, and consumer prices declined 0.2%. Chinese refiners have asked for less crude supply from Saudi Arabia. OPEC's monthly market report stated that speculators were bringing prices down, and the International Energy Agency raised its forecasts for oil demand growth this year and next. However, the IEA also indicated that supply was exceeding expectations and that the global market could tip into surplus in the first quarter of 2024. [f95d5a7c]
Since China's adjustment of domestic refined oil product prices on January 31, oil prices in the international market have been oscillating, according to the National Development and Reform Commission (NDRC). The magnitude of the price adjustment was less than RMB50 per ton, which means that the prices of gasoline and diesel oil were not adjusted this time. The unadjusted amount will be accounted for in the next price adjustment for cumulative addition or offset. The NDRC emphasized that the three major Chinese oil companies and other crude oil processors must ensure stable supply in the market and strictly implement the national price policy. Relevant departments in different regions are urged to step up market supervision and inspection to maintain the normal market order. [f2f1ffaf]
In other news, home improvement retailer Home Depot reported a 12% decrease in earnings in the third quarter, with sales at stores open at least a year falling 3.1%. The report also highlighted changes in the makeup of homebuyers, with a higher share of single female and single male buyers, and increased diversity among homebuyers. [1bd44f04]
Hong Kong's three major oil stocks, CNOOC (00883.HK), PETROCHINA (00857.HK), and SINOPEC CORP (00386.HK), outperformed the market today as international oil prices rose on heightened geopolitical concerns. CNOOC reached a high of over 10 years at $16.1 and is now trading at $15.92, up 3.5%. PETROCHINA rallied for five consecutive trading days, peaking at $6.17, the highest since October 2018, and is now trading at $6.14, up 3.4%. SINOPEC CORP rose for six consecutive trading days, topping at $4.47, the highest in 5 months, and is now trading at $4.45, up 2.3%. The rise in oil prices is attributed to geopolitical factors. UBS envisions that these three Chinese oil companies will benefit from the bolstered oil prices. New York oil futures closed at US$77.91 per barrel. [d0b85002]