Oil from Russia to US snapped up on Asia’s growing appetite

Bloomberg

Physical cargoes of crude oil from Russia, the US and the Middle East were getting snapped up at higher prices as buyers across Asia entered a bidding war to secure supplies.
January shipments of Russian ESPO, a favourite among Chinese and Japanese refiners, were sold at a five-month high premium over Dubai prices after spot differentials for Sokol rose $1 a barrel. In the Middle East, Chinese buyers were seen buying grades such as Das at a premium to its official price.
Buying interest across Asia has been strong after some refiners obtained less oil than usual in term supply contracts from Opec producers such as Saudi Aramco and Iraq’s SOMO. Chinese demand also grew after private refiners received crude-import quotas that were 20% larger than last year’s concession.
Traders also said Chinese importers were on a buying spree for grades from other producers including Brazil and Angola, paying for cargoes that would arrive before mid-February’s Lunar New Year holidays.
More Chinese spot purchases are likely this week after a unit of Rongsheng released a tender to purchase crude for delivery to Zhoushan in February. Last month, the company surprised traders by purchasing millions of barrels of oil as it prepared
to double its crude-processing capacity.
Other processors and trading houses in Japan and South Korea were also picking up cargoes from as far away as US, as Asia acted as a bulwark against faltering oil demand in Europe and the Americas.