Asia demand for West Africa oil soars

LONDON – Asian demand for West African crude in November rose 100 000 barrels per day from the previous month as China boosted its purchases, taking advantage of arbitrage opportunities, traders said yesterday.

Asian refiners bought 1,17 million bpd of mainly Nigerian and Angolan crude, up from 1,07 million bpd in October. “China’s buying was above average this month as the arbitrage was open temporarily,” one trader said.China, the world’s second-largest energy consumer, bought 760 000 bpd of West African crude, up from 552 000 bpd in October.Benchmark prices on the Asia-Pacific crude market have strengthened to all-time highs in line with oil futures, prompting some Asian refiners to look elsewhere for their supplies.The Tapis/Brent Exchange of Futures for Swaps (EFS) has widened to above US$4 a barrel, making Asia-Pacific crude increasingly expensive when compared with Brent-related West African crude.The late surge in Chinese buying helped offset lower demand in other Asian countries.India reduced its buying, taking eight 950 000-barrel cargoes.That is down from 10 stems in October, traders said.Taiwan’s Chinese Petroleum Corp halved its monthly purchases of West African crude, while Indonesia’s Pertamina shunned the region for the second consecutive month.Traders attributed the widening Brent/Dubai spread, which has made Middle East crudes more attractive than West African grades.The spread has expanded to its widest in two and half months with the December EFS at around US$5,50.The following table gives the latest breakdown of November, October and September-loading West African crude cargoes sold into Asia, according to trade sources.Nampa-Reuters”China’s buying was above average this month as the arbitrage was open temporarily,” one trader said.China, the world’s second-largest energy consumer, bought 760 000 bpd of West African crude, up from 552 000 bpd in October.Benchmark prices on the Asia-Pacific crude market have strengthened to all-time highs in line with oil futures, prompting some Asian refiners to look elsewhere for their supplies.The Tapis/Brent Exchange of Futures for Swaps (EFS) has widened to above US$4 a barrel, making Asia-Pacific crude increasingly expensive when compared with Brent-related West African crude.The late surge in Chinese buying helped offset lower demand in other Asian countries.India reduced its buying, taking eight 950 000-barrel cargoes.That is down from 10 stems in October, traders said.Taiwan’s Chinese Petroleum Corp halved its monthly purchases of West African crude, while Indonesia’s Pertamina shunned the region for the second consecutive month.Traders attributed the widening Brent/Dubai spread, which has made Middle East crudes more attractive than West African grades.The spread has expanded to its widest in two and half months with the December EFS at around US$5,50.The following table gives the latest breakdown of November, October and September-loading West African crude cargoes sold into Asia, according to trade sources.Nampa-Reuters