• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 1 hour Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 1 min IMO 2020:
  • 6 hours China's Blueprint For Global Power
  • 12 hours World Stocks Drop And Futures Tread Water After China Reports Worst GDP Growth In 30 Years
  • 2 hours Brexit agreement
  • 3 hours The Ultimate Heresy: Technology Can't Fix What's Broken
  • 20 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 20 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 20 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 13 hours Deepwater GOM Project Claims Industry First
  • 49 mins Idiotic Environmental Predictions
  • 17 hours Why did Aramco Delay IPO again ? It's Not Always What It Seems.

Why Middle East Oil To Asia Is Trading At A Discount

Kuwait tanker

Bucking the trend from last month, when spot cargoes of Middle Eastern oil traded at multi-year premium highs in Asia due to falling Iranian oil supply, this month spot cargoes are trading at discounts to their official prices, due to increased supply from Iran’s fellow OPEC members in the Middle East and to lower demand from Japan, where some refineries had closed in the wake of natural disasters.

Most of the Middle Eastern grades on spot cargoes for December loadings are trading at discounts this month, Reuters reported on Tuesday, citing industry sources.

Last month, refiners asked for a lot of additional Saudi crude, according to a trader at a North Asian refiner. Saudi Arabia is boosting deliveries of Arab Extra Light to some refiners in north Asia, Reuters’ sources say.

Earlier this month, Saudi Arabia was said to be set to deliver extra 4 million barrels of its oil to India in November, in what could be a Saudi move to replace the loss of Iranian barrels due to the U.S. sanctions on Tehran returning early next month.

Apart from Saudi Arabia, Persian Gulf producers Kuwait and the UAE are also increasing supply and have recently launched new crude grades. The UAE’s Umm Lulu and Kuwait’s Super Light Crude are adding a combined 170,000 bpd of new light oil supply, according to Reuters estimates.

The Asian market is currently well-supplied with light sour crude grades, including Saudi Arab Extra Light, grades from the UAE’s ADNOC, and from Kazakhstan, another trader with a refiner in north Asia told Reuters.

Related: Is There Too Much Light Crude On The Market?

While supply is ample, demand in Japan has faltered over the past two months, after a typhoon swept through the country in September, killing 11 people and forcing some refiners to shut refining units.

As of October 10, Japanese refiners had 20 percent of all refining capacity shut down, due to a combination of scheduled maintenance and unexpected closures because of natural disasters, S&P Global Platts has estimated.

Utilization rates in Japan are not very high and spot purchases are at a minimum, a Japanese oil buyer told Reuters on Tuesday.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play