December 1, 2015 / 12:38 PM / 4 years ago

West African crude exports to Asia to hit five-month high in Dec

* 50 percent increase in cargoes to India
    * Murban maintenance spurs buying
    * Total exports highest since July
    * Strong buying fails to boost differentials to dated Brent

    By Libby George
    LONDON, Dec 1 (Reuters) - West African crude oil exports to Asia are on
track to hit a five-month high of 1.96 million barrels per day (bpd) in December
on robust buying interest in India, traders and shipping fixtures showed on
    Refiners on the subcontinent booked 24 cargoes, a 50 percent increase over
the previous month, as they sought to meet surging fuels demand within the
    "Freight is edging up, and Brent/Dubai got so wide," one trader said. "But
differentials just got low enough that they want to buy."      
    Some of the cargoes India booked for January arrival will be met with excess
oil that loaded in November, meaning India's voracious appetite for African
crude is not totally reflected in the December bookings. 
    Remarkably, the strong bookings still left more than 20 million barrels of
West African crude seeking outlets.
    Maintenance on Abu Dhabi's Murban crude field scheduled for February has
reduced the amount of oil available for term buyers in January and February,
leading some to seek Atlantic Basin oil to fill the gap. But firm freight rates
had been weighing on expectations for shipments east. 
    Additionally, the spread between Brent and Dubai crudes DUB-EFS-1M widened
to $3.12 per barrel this week, its widest in roughly 16 months. The wider the
gap, the less competitive Brent-linked grades are to Asian buyers, and the more
difficult it is to make money shipping Atlantic Basin oil to the East.
    But differentials versus dated Brent for Nigeria's largest oil stream, Qua
Iboe, are now at their lowest since April 2005. Other grades are similarly
competitive; official selling prices dropped past a 10-year lows as the country
sought to keep its oil competitive amidst a growing global glut. 
    Chinese purchases of December-loading cargoes from Angola, Nigeria, the
Congo and elsewhere also edged higher. The demand got a boost from so-called
"teapot" refineries, which earlier this year received licences to import crude
oil - and export oil products. Most are expected to ramp up purchases into 2016.
    "The teapot demand is there, and they can book December cargoes for January
arrival," another trader said, adding that other buyers "might be filing up
storage...a lot have floating storage in Singapore."
 COUNTRY           DECEMBER   BPD       NOVEMBER    BPD '000s
                   CARGOES    '000s     CARGOES     
 CHINA             30         919       29          918
 INDIA             24         735       16          507
 INDONESIA         2          61        4           127
 TAIWAN            4          123       3           95
 JAPAN             0          0         1           32
 S. KOREA          1          19        0           0
 OTHERS            3          92        2           63
 TOTAL             64         1,961     55          1,742

 (Reporting by Libby George; editing by Jason Neely)
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