Rare Oil-Price Dislocation Gives Asia a Profitable Arbitrage

Rare Oil-Price Dislocation Gives Asia a Profitable Arbitrage

(Bloomberg) - China's head-start on the path to recovery in oil demand is giving traders a rare opportunity to profit as coronavirus lockdowns continue to depress consumption in other parts of the world.. With Chinese refineries ramping up processing to pre-virus levels as the country's economy re-opens, oil prices on Shanghai's INE futures exchange are near the largest premium to crude from the Middle East since mid-2019.. "China's financial market is recovering faster than rest of the world as more producers resume work and investors are enthusiastic to buy the oil dip on the Shanghai Exchange shoring up the yuan oil futures prices," said Chen Tong, a Tianjin-based analyst with First Futures. ". For those who are spot players, they can also take advantage of the price spread for physical hedging.". The dislocation is causing regional discrepancies in prices.. Since early-April, the INE has been aggressively approving new crude storage sites as delivery points for its futures contract.. It now has 14 depots with combined capacity of 8.5 million cubic meters, according to official data ..