PetroChina has recently made a commitment to purchase a significant amount of crude oil from Canada, Colombia, and Ecuador. According to sources familiar with the situation, the Chinese oil giant has agreed to take at least 8 million barrels of crude that will load in the coming month. This article will discuss the specifics of the deal and the current pricing of Canadian Cold Lake crude.
Details of the Deal:
The commitment made by PetroChina includes the purchase of crude oil from Canada’s Cold Lake variety, as well as from Colombia and Ecuador. The deal will see the Chinese oil company take at least 8 million barrels of crude from the three countries, which will load next month.
The move comes as China looks to increase its imports of crude oil from a range of different countries. This is in part due to the ongoing trade tensions between China and the United States, which have led China to seek out new sources of oil in order to reduce its reliance on US imports.
Pricing of Canadian Cold Lake Crude:
As part of the deal, PetroChina is reportedly being offered Canada’s Cold Lake variety crude at a discount of around $11.50 per barrel to the ICE Brent benchmark. This discount is being offered on the US Gulf Coast, where the crude will be delivered.
The discount being offered for Canadian Cold Lake crude is due in part to a recent surge in production from the oil sands in Canada. This has led to an oversupply of the crude, which has put downward pressure on prices.
PetroChina’s commitment to purchase 8 million barrels of crude oil from Canada, Colombia, and Ecuador is a significant development in the oil industry. It is clear that China is looking to diversify its sources of oil, and this move will likely have an impact on the global market for crude.
The discount being offered for Canadian Cold Lake crude is a reflection of the current oversupply of the crude in the market. It remains to be seen how long this oversupply will last, and whether the discount will continue to be offered in the future.
Overall, this deal highlights the ongoing importance of crude oil as a global commodity, and the complex market dynamics that underpin its pricing and availability.