Oil Daily | Crude Prices Rise Amid US-China Trade Uncertainty; Chinese Refiners Face Earnings Decline

【Global Oil Supply and Demand】

Chinese coal producers and oil refiners face weaker profits due to oversupply and low demand. Steel demand may decline amid the U.S.-China trade war. Sinopec reported a 17% earnings drop in 2024, affected by lower oil prices and electric vehicle adoption. Weak domestic coal prices led to reduced imports.

【Oil-Producing Countries Dynamics】

China's coal and refined product oversupply impacts profits. China Shenhua Energy's net income fell 18% in Q1 2025. Domestic Bohai-Rim Bay thermal coal prices hit four-year lows in April, with a 6% drop in imports in March due to weak demand.

【Latest Oil Policies】

China's officials assure the public about economic resilience amid the U.S.-China trade war, aiming for 5% GDP growth despite reduced U.S. agricultural and energy imports. The IMF cut China's growth estimate to 4%. China claims U.S. farm products are substitutable, minimizing impact on energy supplies.

【Industry News】

Crude oil prices rose despite no significant tariff negotiation progress between the U.S. and China. Mixed signals from Washington about talks add to uncertainty. ING reports bullish signs in the physical market due to tightening prompt timespreads.

【Company News】

Sinopec and other Chinese refiners struggle with overcapacity, impacting earnings. Promise to address overproduction persists, but no measures announced. Sinopec's 2025 Q1 earnings are expected to drop significantly. Industrial firms, especially oil refiners and steel-makers, perform poorly amid these challenges.

【Others】

No U.S.-China trade deals were signed at the IMF-World Bank meetings, indicating extended tariff and oil price uncertainty. Treasury Secretary Scott Bessent's absence from tariff talks raises doubts despite President Trump's claims of discussions with Chinese officials.