China and US to sign first phase of trade deal agreed to this month

Fundamental News:  US President, Donald Trump, said he and China’s President, Xi Jinping, will have a signing ceremony to sign the first phase of the US-China trade deal agreed to this month. 

China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year as Beijing looks to increase imports.  Next year, China will implement temporary import tariffs on more than 850 products.  By comparison, 706 products were taxed at temporary rates in 2019.  China’s Finance Ministry said the tariff changes were made to “increase imports of products facing a relative domestic shortage, or foreign specialty goods for everyday consumption.” 

Kuwait and Saudi Arabia agreed to divide their shared Neutral Zone and resume up to 500,000 bpd of oil production from two joint oilfields there.  Kuwaiti Foreign Minister, Sheikh Ahmad Nasser al-Mohammad al-Sabah and Saudi Minister of Energy, Prince Abdulaziz bin Salman signed agreements in Kuwait.  Two countries halted production from the Khafji and Wafra fields, which produced about 500,000 bpd in 2014 and 2015, respectively. 

Chevron expects Saudi-Kuwaiti Neutral Zone’s Wafra oilfield to return to full production within 12 months.  Kuwait and Saudi Arabia signed a deal aiming to end their five-year dispute over the Neutral Zone and resume production which can amount to up to 0.5% of global oil supply. 

Total said that its 102,000 bpd Grandpuits refinery was continuing to produce at reduced flow after CGT union voted to halt output at the plant as part of a nationwide protest against a planned pensions reform.  The refinery will continue to produce until December 30th when the union will hold another general assembly meeting.

Curacao’s state-run refining company, Refineria di Korsou, said it signed an agreement with industrial commodities conglomerate Klesh Group to operate the island’s 335,000 bpd Isla refiner and storage facilities.  The asset purchase and sale agreement, signed on Sunday, entails the sale of the Isla complex including its oil storage terminal, with a long lease on the land.  The agreement would put Kresch in charge of the Bullenbay oil terminal, with its 17.75 million barrels of storage and blending capacity. 

Early Market Call – as of 9:35 AM EDT

WTI – Feb $61.45, up 34 cents

RBOB – Jan $1.7478, up 2.1 cents

HO – Jan $20477, up 1.12 cents

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