Name: China Is New Swing Buyer of Oil, Blanch Says
Uploaded: 2026-08-13T14:18:59+00:00
Duration: 484 s

Speakers

Francisco Blanch — Head of Global Commodities and Derivatives Research, Bank of America

Summary

Francisco Blanch argues the oil market's problem is not crude supply but refined fuels, with global gasoline, diesel, and natural gas markets tight. He explains China has become the swing buyer in oil, supporting Brent near term but creating 2027 downside if Hormuz and Russia-Ukraine flows normalize. He also sees US fuel prices moving higher and a broad commodity rebound in copper, agriculture, and gold amid loose policy and AI-driven demand.

Global refining bottlenecks from Russia, Hormuz, and China fuel export curbs make refined products tight.
Natural gas is a global tightness problem with low inventories before winter.
China has cut oil imports from about 12 million barrels per day to 7 million and behaves as the swing buyer.
BofA forecasts Brent around $82 in 2026 and about $70 in 2027 on a likely surplus.
US gasoline and diesel prices likely rise further because inventories are very low.
Copper is tight on Codelco supply cuts, electrification, tariff risk, and inventory depletion.
Agriculture and gold are adding to a broad commodity complex recovery.
Lax monetary and fiscal policy plus the AI race support commodity demand and inflation pressures.

Ideas

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 0:14

Global refined fuel supply is very tight.

The world does not have a crude oil problem, but fuel and refined products are critically tight because three of the four main global refining centers are curtailed: Russia's ban on gasoline and diesel exports, the Strait of Hormuz product disruption, and China's fuel export restrictions. Bottlenecks are everywhere, and the tightness is showing up in product prices.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 1:03

Global natural gas inventories remain dangerously tight.

Natural gas is a global problem: Europe is dealing with its fifth heat wave, nuclear power is running low, river water levels are low and warming, and the solar eclipse has reduced generation. Inventories are uncomfortably tight heading into September, October, and winter, leaving the market dependent on another warm winter.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 2:03

China swing buying supports Brent near term.

China has become the world's swing oil buyer: it cut imports from about 12 million barrels per day to 7 million, drew on its own reserves, restricted fuel exports, and will buy more if prices fall and stand back if prices rise. If China returns to normal buying, it would support prices, and BofA forecasts Brent to average about $82 a barrel in 2026.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 4:31

US gasoline and diesel likely rise further.

US gasoline and diesel prices are bumping against early-June highs even though the US is at a seasonally low point for fuel consumption. Prices are likely to go higher because inventories are running very low, and without a geopolitical resolution in Hormuz, low inventories will force price volatility up and ration demand.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 5:42

Copper supply tight and inventories falling.

Copper is super tight: Codelco has rebased its supply growth expectations lower, electricity demand is growing faster than GDP due to electrification, there is talk of a potential US copper tariff on January 1, and buyers are pulling copper into the US while global inventories deplete. Record US copper prices reflect these pressures.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 6:24

Weather and geopolitics push agriculture higher.

Agricultural commodities are ripping higher because weather effects and geopolitics are hitting supply at the same time, adding to the commodity complex pressures.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 6:42

Gold shows signs of renewed strength.

Gold is finally showing signs of life as part of a broad commodity complex recovery, supported by lax monetary and fiscal policy, zero or negative real rates, and geopolitical and weather-driven supply pressures across commodities.

Francisco Blanch Head of Global Commodities and Derivatives Research, Bank of America 6:45

Commodity complex returns as a strong theme.

The whole commodity complex is coming back to the fore over the next few months, with pressure in energy, industrial metals, agriculture, and gold. Policy is also supportive because the Fed is not pushing up the front end, fiscal policy remains lax, real rates are zero or negative, and the AI race is adding demand.

China Is New Swing Buyer of Oil, Blanch Says

Summary

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