NEW YORK/SINGAPORE Feb 3 Oil majors and trading
houses are set to ship an unprecedented volume of U.S. crude oil
to Asia in coming weeks, boosting already high flows to the
region due to higher prices from OPEC production cuts.
Traders have estimated that some 700,000 to 900,000 barrels
per day is set to leave the United States in February, with the
majority of the cargoes headed to Asia.
That volume would be the highest monthly level on record,
according to the U.S. Energy Information Administration, helping
reduce an U.S. inventory glut that has pressured prices for two
The flood could create a supply surplus in Asia, possibly
pushing prices for regional grades lower, traders said, as local
refiners are ill-equipped to process that flow.
The economics recently became favorable after Brent's
premium over U.S. crude widened to the most in nearly a year.
The widening differential for Middle East benchmark
Dubai DUB-1M-A over U.S. crude also opened the arbitrage to
the Far East.
The U.S. crude cargoes, which will include both light and
heavy grades, will reach China, Japan and Singapore, according
to four trading sources and Reuters shipping data. Some exports
are also headed to Europe and Latin America.
"It's a good time to buy U.S. crude because of the OPEC cut,
but our spot room has limitations so we have to compare every
cargo," said an official with a Japanese refiner, who declined
to be named due to company policy.
Mercuria has booked the Front Balder, a Suezmax, to send
crude from the U.S. Gulf to Qingdao, China, according to sources
and vessel tracking data. It appears to have stopped in Colombia
along the way. A company spokesperson could not be reached for
BP Plc is sending the Cap Guillaume, a Suezmax, from
the U.S. Gulf to Singapore next week, according to sources and
tracking data. It was not immediately clear if the cargo details
would change; a company spokesperson could not be reached for
Shell also booked the Gener8 Daphne, an Aframax, to
Singapore. On Friday, it was docked outside of Texas City at the
Teppco Seaways Crude Berth. A company spokesperson could not be
reached for comment.
BP and Trafigura are said to be marketing at
least 3 million barrels of U.S. Eagle Ford crude in Asia, three
traders said. Two very large crude carriers (VLCC), Awtad and
Manifa, were booked to arrive in China and Singapore in
(Reporting by Catherine Ngai in New York, Florence Tan in
Singapore and Liz Hampton in Houston; Editing by Tom Brown)