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Sinopec to Import Record Crude Volumes From United States

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China Petroleum and Chemical Corporation or Sinopec is buying record-high volumes of U.S. crude, which will likely drive oil import by China from the United States to an all-time high, per Reuters.  

China has vowed to bump up imports of American products that will likely ease the trade war with its top trading partner. The huge trade deficit of United States with China – recorded at $375 billion per media reports – will eventually come down.

UNIPEC, the wholly-owned affiliate of Sinopec, is going to ship 16 million barrels of American oil in June. With this, UNIPEC will load the highest monthly crude volume. The purchase of U.S. oil for the month of June by UNIPEC is estimated at $1.1 billion, Reuters added.

China is in a position to import more U.S. oil. However, the hindrance to this move has been the bottleneck for Gulf coast midstream infrastructure. The other problem is that oil produced in the United States is light while China has prioritized heavy crude, the source said.

Headquartered in Beijing, Sinopec is the largest refiner of crude in Asia. The company has also made major progress in identifying attractive and economically viable oil and natural gas reserves.

However, the company’s pricing chart is not impressive. Over the past year, the stock has gained 23.3%, underperforming the industry’s 49.3% rally.

Currently, the stock carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, a few better-ranked players in the energy sector are BP plc (BP - Free Report) , Occidental Petroleum Corporation (OXY - Free Report) and WildHorse Resource Development Corporation . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BP managed to beat the Zacks Consensus Estimate in three of the last four quarters.

Occidental Petroleum is expected to record earnings growth of 333.7% in 2018.

WildHorse is likely to see year-over-year earnings growth of 288.4% in 2018.

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