China’s Crude Inventories, Russia’s Latest Oil Measures, and Hydrogen Demand

Feb 13, 2023

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The increase in Chinese oil demand may not cause a significant increase in oil prices. China will use its SPR to prevent the price of Brent crude from increasing to $100/b as it did in 2021.
Up to 81% of the changes in China’s total oil inventories are linked to changes in oil prices.
China’s total oil inventories are higher than US inventories by at least 200 mb.
Setting Russian oil prices at a discount to Brent for tax purposes while cutting production by 500,000 b/d has no impact on the oil market.
Long-term hydrogen demand is expected to grow significantly. Power and natural gas traders can utilize their expertise to engage in the emerging hydrogen market and its various derivatives.

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