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Bloomberg
Asian buyers are snapping up oil at higher prices than last month, helping to bolster physical crude markets across the world and underpin a rally in futures.
Driven by a slew of purchases from Indian and Chinese refiners, crude values everywhere from Russia to the Middle East and Latin America have surged so far. Spot trading activity has been brisk as India’s largest refiner and at least one independent Chinese one got ahead of the competition to secure cargoes.
Chinese daily refining rates rose to a record for a second straight month in November, while several Indian processors are operating at close to 100% capacity on the back of stronger gasoline and liquefied petroleum gas demand. It comes as the region leads the way in the global oil market’s recovery from the demand slump brought on by the coronavirus outbreak.
“Asia is very much driving the market at the moment,†said Kitt Haines, an analyst at Energy
Aspects.
Brent crude futures were little changed, trading at $50.73 a barrel in London. US benchmark West Texas Intermediate crude futures traded at $47.58.
Rongsheng Petro Chemical Co, one of the most active spot-market buyers since its refinery expansion earlier this year, bought cargoes from as far away as the US and the North Sea this week. A total of nine supertankers departed to Asia after loading with North Sea grades last month, compared with six for October, helping lift the key Forties grade to a three-month high.
At the same time, Indian Oil Corp has been busy snapping up cargoes from multiple regions in the past few weeks. The nation’s largest refiner has sought everything from West African oil to grades from the Middle East and the US so far.