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Asian Buyers Turn to US in Hunt for Cheap Oil
Asian Buyers Turn to US in Hunt for Cheap Oil

Asian Buyers Turn to US in Hunt for Cheap Oil

Asian Buyers Turn to US in Hunt for Cheap Oil

Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit US demand for the commodity at a time of rising production in the country.
As many as 11 tankers, partly or fully laden with US crude, are due to arrive in Asia in November, with another 12 to load oil in the United States later in October and November before sailing for Asia, according to shipping sources and data on Thomson Reuters Eikon.
US West Texas Intermediate crude benchmark stands at its largest discount in years against the Atlantic Basin’s Brent, with local appetite curbed as US refineries are still pushing to get back on track in the wake of hurricanes such as Harvey.
“Between November and January, there is a very big volume of US crude heading to Asia,” said a Chinese trader who has bought 4 million barrels of medium-sour US oil to arrive in December. He declined to be identified as he was not authorized to speak with media.
The price-spread between the two crudes had already pushed US crude exports to a record 1.98 million barrels per day by late September, according to the Energy Information Administration in the United States.
"Exports in the next two to three weeks could hit 2.2 million bpd," Marco Dunand, chief executive of trading house Mercuria, said last week. That has also been driven as some Asian governments look to diversify supply sources and reduce trade surpluses with the world’s top economy. India joined China, Japan and South Korea when it imported its first US crude in October. And high premiums for Middle Eastern grades of crude are also stoking Asian appetite for US supplies.
“US medium sour grades can replace most Middle East grades and the light sweets may replace some African crude,” said the Chinese trader.
China remains the largest buyer with four tankers, followed by three to South Korea and two to India. The remaining two could head to Singapore, the data show.

 

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