Cheap USA Oil Snapped Up in Asia

Cheap USA Oil Snapped Up in Asia
Asian buyers are snapping up cheap U.S. crude cargoes despite lingering demand concerns due to the latest Covid-19 resurgence.

(Bloomberg) -- Asian buyers are snapping up cheap U.S. crude cargoes despite lingering demand concerns due to the latest Covid-19 resurgence, with the flurry of deals likely to be at the expense of Middle Eastern barrels.

Chinese, Indian and South Korean companies have purchased at least 7 million barrels this month for arrival through October to November, said traders who buy and sell that crude. The level of interest for U.S. oil has been higher than the same period in July as prices for American grades were trimmed with the summer travel season winding down and domestic demand dipping, they said.

Middle Eastern producers, however, hiked crude prices for Asian customers this month, even as the fast-spreading delta variant led to renewed restrictions on movement across the region, most notably in China. The resurgence has led to the International Energy Agency cutting its global oil demand estimates for the rest of this year, while predicting a new surplus in 2022.

Indian refiner Bharat Petroleum Corp. bought 2 million barrels of West Texas Intermediate Midland crude for October arrival, while two other Northeast Asian buyers acquired 5 million barrels of the Mars grade for November.

While offers for U.S. oil have gained slightly recently, they are still competitive against comparable grades from the Middle East and Russia’s Far East, said the traders. The premium of benchmark West Texas Intermediate to Middle East’s Dubai marker was at 61 cents a barrel on Friday, compared with a premium of more than $2 a month earlier, according to data compiled by Bloomberg.

--With assistance from Debjit Chakraborty.

© 2021 Bloomberg L.P.



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Most Popular Articles