Japanese and South Korean buyers will snap up Atlantic crude oil cargoes in the coming months, ahead of an expected demand boom in the winter, according to a new report from Reuters.
Oil loadings from Europe and the Americas stagnated in June after an increase in shipments in March and May. Analysts say July could be a prosperous month for the North Sea Forties grade, as well as American crudes, as Asian players become more active.
Japan’s JXTG and Cosmo Energy bought U.S. cargoes that are due to arrive in September, according to trade sources. They except between 2 and 4 million barrels of North Sea crude to reach South Korea by early September.
"U.S. crude has high potential. We want to diversify our supply sources (and are interested)," a Southeast Asian refiner said, adding that both light-sweet and medium-sour crude were of particular interest to the region.
But North American and European suppliers face stiff competition from OPEC’s top oil producer. After Saudi loadings bound for East Asia fell for four consecutive months from January, they are rebounding strongly in June, while both Iraqi and Venezuelan flows to the region are also looking robust. Total OPEC export loadings for Asia so far in June have jumped to the highest on record, after ticking lower for the past three months.
There’s also the issue of super-giant tankers holding millions of barrels of unsold oil floating in Asian waters, which could easily be fed to markets in the region. Reuters reported yesterday that a growing number of old oil tankers have been contracted out to store oil in Southeast Asia, which allows traders to pay for storage in hopes of selling their goods at a higher price at a later date. Many of those cargoes will head to China soon, analysts say.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…