Confirming our recent reporting on China's oil demand collapse, crude oil imports to China in May fell to their lowest since October 2017 because of the price spike resulting from the Persian Gulf tanker traffic disruption, plunging refinery margins (due to price ceilings imposed by Beijing), of a slowing economy and the rapid slowdown in the economy.
The May total stood at 33 million barrels, or 7.8 million barrels daily, Bloomberg reported, citing Chinese customs data. This is roughly a 30% drop vs the average daily import rate of 11.6 million barrels last year. As previously noted, refinery run rates are down as well, as are fuel exports, with Beijing careful to make sure there is enough diesel and gasoline for the domestic market. All this is happening as the latest batch of Chinese data was "shockingly bad", promptly fears of a China hard landing.
As OilPrice notes, the news will likely push oil prices lower as China’s reduced appetite for imported crude is widely seen by traders as a cap on international prices. Demand for oil in China, however, has not fallen particularly. The only reason the country’s refiners can afford to slash imports is the substantial inventory cushion available, estimated at over 1 billion barrels, which we said three months ago is the biggest wildcard in the Iran war oil price shock. However, this cushion is not infinite and, as suggested recently by analysts, China will at some point start to ramp up imports.
One relevant question: what is China's pace of SPR drain if any. Recall for the past year Beijing was adding about 500-700K in daily SPR stockpiles; total is said to be ~1.4 billion barrels. China can avoid any Gulf imports for months and drain its SPR instead.
— zerohedge (@zerohedge) March 18, 2026China’s subdued oil buying from abroad “represents one of the largest offsets to the shock, second only to Saudi rerouting flows and larger than coordinated SPR releases from the U.S., Europe, and Japan,” Societe Generale commodity analysts said earlier this week. However, strategic and commercial oil inventories need replenishing at some point, and when that point is reached and the war is still not over, we are likely to see higher oil prices again. In its lenghty weekly note, JPM commodity analysts agreed.
ING commodity analysts made a similar point last week. “Sizeable inventories in the lead-up to the war have provided a buffer for the market,” Warren Patterson and Ewa Manthey wrote on Friday. “This buffer is shrinking with every passing day. With the seasonally stronger summer still ahead of us, we could see demand grow by more than 3m b/d quarter-on-quarter in the third quarter. The pace of inventory declines will only intensify through the July-September period.”
Tyler Durden Tue, 06/09/2026 - 12:40Authored by Jonathan Turley via JonathanTurley.org,
There is an interesting controversy brewing in California after four California university professors threatened a political candidate, Richard Lucas, for criticizing them for their roles in the "Billionaire Tax" and sent him a "cease and desist" letter.
David Gamage from the University of Missouri, Brian Galle and Emmanuel Saez from UC Berkeley, and Darien Shanske from UC Davis claimed that the public criticism violated anti-doxxing laws by sharing contact information. They are clearly wrong. One of the aggrieved professors, Brian Galle, teaches at Berkeley Law School called Lucas "a clown," but insisted that sharing public information is unlawful.
Attorney Catha Worthman sent the letter, but has reportedly refused to respond to inquiries after attorneys for the Alliance Defending Freedom (ADF) pushed back on her legal claims and those of her clients.
I have long been a critic of such wealth taxes, specifically California's Billionaire Tax, as economically moronic and legally questionable. The proposal has already cost the state trillions in lost wealth as wealthy taxpayers have fled, taking their businesses and jobs with them.
As I discuss in Rage and the Republic, these wealth taxes have a terrible track record and, on the federal level, face serious constitutional challenges. In California, the drafters included a retroactive clause that can also be challenged.
One of the four professors - who Lucas referred to as "the looter dream team" - destroyed the claims of many supporters that this is just a one-time tax. Some of us have written that this is simply the first salvo. Once they succeed in targeting billionaires, the same measure will likely be used for those in lower tax brackets.
In a recent debate, Berkeley professor Emmanuel Saez admitted that he could not seriously claim this would be a one-time tax, as many in the public have asserted. He said they would have to wait to see if it passes, but it is likely to be repeated, and noted that there may also be a federal wealth tax on the way.
He said:
"I don't think it's going to be a one-time tax...because you can't surprise billionaires more than once.
Even then, you know, maybe some of them were expecting something like this.
So it's going to be a debate about this time, you know, a permanent wealth tax at a low rate that's going to last for a number of years."
Saez has publicly taunted the wealthy who are fleeing the state:
He noted the move on the left to create a federal wealth tax which has been pushed by Bernie Sanders and Ro Khanna.
The legislation, "Make Billionaires Pay Their Fair Share Act," echoes the growing "eat-the-rich" mantra on the left - seeking to replicate a disastrous push in California that has led to an exodus from that state and an estimated loss of $2 trillion in taxable assets.
It is also flagrantly unconstitutional.
Under the plan, Congress would target 938 billionaires to tap them for $4.4 trillion. That money would then be redistributed as a $3,000 direct payment to every man, woman, and child in a household making $150,000 or less - $12,000 for a family of four.
Now back to the legal threat. I believe that the threatened legal action is wildly off base. Putting aside the fact that this is protected speech, the two anti-doxing statutes, Penal Code §653.2(a) and Civil Code §1708.89, contain clear scienter or intent requirements.
They must show that Lucas demonstrated an "intent to place another person in reasonable fear for their safety, or the safety of the other person's immediate family." Penal Code §653.2(a); Civil Code §1708.89. There is no evidence of such intent. If simply posting such identifying information is a violation, a significant range of protected speech would be proscribed.
There are ample reasons to criticize this tax and the claims made by its champions. There is a type of self-sustaining pattern on the left in support of such measures. Universities have largely purged conservatives and libertarians from departments, leaving most faculties with professors who run exclusively from the left to the far left.
These professors then added intellectual support for radical proposals like wealth taxes. The media then reports that experts have reviewed and approved the measures. It becomes an entirely closed loop from political groups to academics to media creating a uniform narrative.
The ADF wrote a strong letter pointing out the flaws in the claims of these professors under anti-doxxing laws from the lack of intent to the protection of free speech. These professors became public advocates for this ill-conceived plan and, as a result, have drawn criticism for that advocacy.
Lucas was one of those critics:
First they say the billionaire tax is one time. Now the main architect is already talking about making it permanent.
— Richard Lucas (@dickclucas) May 10, 2026Nevertheless, the professors sent two cease and desist letters to Lucas, requesting that he remove their names and contact information from his website "California Wealth Exodus." Lucas has remained adamant that he will not remove their contact information.
The site for figures like Galle link to his academic page, as I have done above. We routinely link to such sites for people to look at the background of figures discussed in columns. In the case of Lucas, it is also meant to allow citizens to express their views to those pushing this proposal.
In my view, the threat of legal action is fundamentally flawed and would not prevail in the courts. These professors will need to respond to their critics rather than work to silence them.
Tyler Durden Tue, 06/09/2026 - 12:20"Turns out, we weren't bullish enough on copper," Jefferies analyst Christopher LaFemina wrote in a note to clients, marking a notable shift from one of Wall Street's most seasoned metal voices. LaFemina joined Jefferies in 2011 after more than a decade covering metals and mining at Lehman Brothers and Barclays, lending weight to his view that the explosive growth in AI data center buildouts, power grid and infrastructure upgrades (a theme he calls "powering up America"), and tight supply are creating structurally higher prices for copper.
LaFemina raised his 2030 target and now expects copper to average $8 per pound, or $17,636 a ton. COMEX copper last traded around $6.34 a pound, while LME copper was near $13,583 a ton.
On a longer timeframe, the LME copper chart suggests the $10,000 level was the breakout zone, further supporting LaFemina's 2030 target given the current supply-tightening backdrop.
"Turns out, we weren't bullish enough on copper," LaFemina said, adding, "We now have the highest copper price forecast on the Street as we see strong US industrial demand and still tight supply."
He noted that the data center and power infrastructure buildout should drive a meaningful acceleration in metals demand, with copper and aluminum prices able to rise much higher before weighing on the broader economy.
Goldman recently estimated that AI capital expenditures by hyperscalers will soar to $800 billion this year. The report can be found here.
In recent weeks, Goldman raised its year-end copper price target, and HSBC warned (report found here) that commodities face a "super-squeeze."
HSBC analysts told clients last week that "metal prices are generally in an upswing, driven by supply disruptions for some commodities due to the Middle East conflict and strong structural demand."
Separately, Goldman analysts led by Aurelia Waltham explained that one of the core issues with the copper market right now is supply:
At the same time, Waltham said stronger-than-expected U.S. copper imports in the first half of 2026 are tightening the ex-U.S. market:
The combination of soft mine supply, U.S. stockpiling, tariff uncertainty, and long-term demand tied to AI buildout and grid-upgrade themes prompted Waltham to upgrade her end-of-year 2026 and 2027 copper price forecasts:
She outlined three price scenarios for copper:
1. Strait of Hormuz Remains Closed for Longer: While we would expect limited impact on the global copper balance as the demand hit from lower economic growth is largely offset by lower copper supply due to sulfur shortages, a substantial pullback in global risk appetite could push the LME price down to its fundamental support level at ~$12,600 in H2 2026, before resuming an upward trend.
2. US Copper Tariff Announced for January 2027: If a US copper tariff is announced prospectively in June 2026, to start in January 2027, we would expect US copper imports to accelerate in H2 2026 (vs. our base case of a slowdown in imports), tightening the ex-US balance and raising prices to over $14,000 in H2 2026. However, we would expect prices to retreat in 2027 as imports stop once the tariff is imposed.
3. Announcement of No Copper Tariff: A definitive decision against the tariff would reduce the size of our ex-US deficit forecast in 2026 and push the ex-US market back into surplus in 2027 as imports fall to a negligible level. In this scenario, we would expect the price to fall to an average of $12,800/t in 2027.
View scenarios here:
Beyond Jefferies, HSBC, and Goldman, JPMorgan analysts have also told clients that the copper upcycle is being driven by a tightening supply backdrop, accelerating power-grid investment, AI data center demand, and broader industrial electrification. Taken together, some of Wall Street's top metals desks are increasingly converging on the view that copper is entering a structurally tighter supply regime that will support a sustained break above $14,000 a ton on the LME.
Tyler Durden Tue, 06/09/2026 - 12:00