Record W.African oil sailing east, propelled by China demand

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* Chinese bookings surge on destocking, strong demand * China’s Q4 oil stocks dropped 40-60 mln bbls-Energy Aspects * Total WAF loadings for Asia hit record * Graphic on oil exports to Asia: tmsnrt.rs/2dG0SuJ By Libby George LONDON, Jan 10 (Reuters) – Shipments of West African oil to China are set to surge to a record in January, boosting overall fixtures heading east to their highest in at least 14 years, a Reuters survey of shipping fixtures and traders showed on Wednesday. China’s loadings are expected to jump by more than 20 percent from December to more than 1.5 million barrels per day (bpd) in January, the survey showed. The figure is the highest barrel-per-day total to sail for China since September, and is some 37 percent above the same month last year. Traders said China’s appetite was whetted in part by the first batch of government import quotas for 2018, which were issued in late December, but announced in November. This prompted some companies to book cargoes early in order to arrive as quickly as possible. Energy Aspects said a large amount of destocking in the fourth quarter, which amounted to a total drawdown of some 40-60 million barrels in China, also prompted strong demand from the world’s second-largest oil consumer. “There’s certainly a large pull from China,” said Michal Meidan, Asia analyst with Energy Aspects. “Demand has been good and the runs have been high. They need the crude.” The bookings helped to propel overall fixtures heading east to 2.39 million bpd, a record since Reuters tracking began in 2004. The previous record was in April 2015 at 2.343 million bpd, when India booked more than 1 million bpd. Still, there is fierce competition for Chinese and other Asian buyers, with U.S. crudes increasingly edging into the market, often at the expense of West African grades. Supply of Russian ESPO Blend is also increasing this year. Already, PetroChina has nearly doubled the amount of Russian crude processed at its refinery in Dalian as a new supply agreement has come into effect. Additionally, Meidan said China’s meteoric demand growth in 2017, which Energy Aspects pegged at roughly 800,000-900,000 bpd year-on-year, will also slow substantially in 2018, limiting new opportunities to sell the nation oil. COUNTRY January BPD December BPD ‘000s cargoes ‘000s cargoes CHINA 52 1,594 43 1,318 INDIA 16 490 17 521 INDONESIA 2 61 4 123 TAIWAN 2 61 2 61 JAPAN 0 0 0 0 S. KOREA 0 0 0 0 OTHERS 6 184 7 215 TOTAL 78 2,390 73 2,237 (Reporting by Libby George; Editing by Mark Potter)

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