Published Date : Oct 06, 2015
Crude oil exports from West Africa to China were expected to drop to a low of four years this month, indicating that the major buyer country has little interest in importing spot crude in the beginning of fall.
A report by Reuters revealed in its most recent survey that shipping fixtures and oil traders forced overall exports to Asia to reach its lowest point in over a year despite the fact that many Indian refineries such as state run HPCL, IOC, and BPCL as well as Reliance have been presenting steady buying patterns.
The survey indicated that Asian refinery runs are much lower owing to seasonal maintenance that has caused their need for crude oil cargoes to max out. The nation’s interest in spot cargoes also declined owing to run cuts in China earlier this year following after poor margins.
The agency revealed that China’s buying interest in November was already looking up and trader Unipec was acquiring many loading spot cargoes meant for November from Angola. However, October exports were the lowest since the year 2011, the Reuters report indicated, and were at an estimated 24 cargoes or an overall figure of 735,000 barrels a day.
Data from Reuters also indicated that Saudi Arabia, a major exporter from the Organization of Petroleum Exporting Countries is anticipated to slash crude oil export prices to Asia next month in order to retain its share in the market.
In addition to this, traders warned that a few of the planned exports, especially exports to India, were likely to fall through owing to complications stemming from Nigeria’s requirement of a letter of comfort. This requirement was implemented this month itself and requires owners of the vessels to show proof of a guarantee that in case of thefts vessels will not be used.