China to old G20 under blue skies - UOB

Analysts at UOB explained that Bloomberg News reported that ahead of the G-20 summit in Hangzhou in early September, Chinese authorities have ordered hundreds of factories to curb activity, in a bid to ensure blue skies when the red carpet is rolled out.

Key Quotes:

"According to industry consultant Energy Aspects Ltd, the curtailments, along with flooding earlier this summer, may cut petroleum demand in the world’s second biggest oil consumer by 250,000 barrels a day in the third quarter."

"The slowdown at facilities including refineries and petrochemical plants along the Yangtze River threatens to weaken Chinese oil imports that rose to record highs in the first half of the year, sometimes exceeding even those of the U.S."

"Those unprecedented purchases, along with supply disruptions, helped crude rally about 80% from a 12-year low earlier in 2016, and any sustained recovery will hinge on continued strong demand from the world’s biggest energy consumer."

"Indeed, other developments may add on to the headwinds for global oil prices. Oil had already added to its biggest loss in three weeks on concern that increased Iraqi exports will compound a global oversupply of crude. Iraq will boost shipments by about 5% in the next few days following an agreement to resume exports from three oil fields in Kirkuk."