By Libby George
LONDON, Feb 3 (Reuters) – China’s red-hot crude oil buying will push its February loadings of West African crude to their highest in at least 13 years, a Reuters survey of traders and
shipping data showed on Friday.
Buying for China, led by state-run Unipec and Sinochem but joined by some trading houses supplying the independent refineries, hit a total of 40 cargoes for February loading.
At a level of 1.36 million barrels per day (bpd), this is the highest since Reuters began tracking the shipments in 2004.
The purchases boosted overall shipments to Asia from West Africa to 2.31 million bpd, their highest since April 2015, and 28 percent above the previous month on a bpd basis.
The buying was driven in part by a narrow spread between Brent and Dubai crudes DUB-EFS-1M, which makes West African grades more competitive in Asia.
Michal Meidan, Asia analyst with Energy Aspects, said the figures were “not overly surprising given the OPEC production cuts and Asia’s need for alternative barrels”.
Production cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers have sent refineries scrambling to source alternative medium and heavy crude oil. Falling oil output in China has intensified the
need for alternatives.
Meidan added that Chinese buyers are also stocking up in anticipation of higher oil prices in the second half of the
The Chinese buying centred on Angolan crude, with less than a dozen cargoes of the loading plan from that nation sailing to destinations outside Asia.
But China’s state-run refineries also bought one cargo of lighter oils, including Nigeria’s Bonga and Akpo condensate.
Other Asian buyers have also boosted purchases of light sweet oil, including Nigerian grades, pushing regional grades lower.
COUNTRY February BPD ‘000s January BPD ‘000s
CHINA 40 1,357 38 1,165
INDIA 18 611 16 490
INDONESIA 3 102 1 31
TAIWAN 2 68 2 61
JAPAN 0 0 0 0
S. KOREA 1 34 0 0
OTHERS 4 136 2 61
TOTAL 68 2,307 59 1,808