Indian buying helps offset drop in China’s W. African oil appetite
Indian refineries booked the largest amount of West African oil to load per day in February since April 2015, helping to shore up a decline in Chinese buying, a Reuters survey of vessel fixtures and traders showed.
Indian refiners Reliance and Essar joined state-run Indian Oil Corp (IOC) in booking ships to ferry West Africa oil east, running the total up to 780,000 barrels per day (bpd) – close to a three-year high on a bpd basis.
Essar bought a cargo of Dalia from Angola’s Sonangol, while Reliance booked several ships to load Nigerian, Angolan and Congolese crude, the fixtures showed.
The purchases helped to offset a steep drop in bpd-loadings for China, which fell to 1.22 million bpd from a record of 1.59 million bpd the previous month. While China is still a key outlet, particularly for Angolan oil, its buyers have a wide range of options, and turning away even slightly makes more of it available to others.
“Demand for some grades was down from more regular buyers, so Angolan had to be priced low to move,” one trader said.
This in part helped drive some of the Indian buying, sources said. While IOC is a regular buyer of West African oil, typically via tenders, Essar and Reliance tend to opt for the region’s crude only when it is particularly competitive.
Traders said a rush to clear out February-loading cargoes, along with some length in Angolan barrels as Chinese buyers backed away, helped lure the refineries.
The cargoes will also arrive in March and April, around the time refineries are concluding spring maintenance and looking to run full steam, traders said. ExxonMobil also booked West African oil to sail to Australia.
Total loadings of West African oil to Asia slid to 2.17 million bpd as a result of the slowdown from China, down from a record 2.39 million bpd in January.
COUNTRY February BPD January BPD '000s cargoes '000s cargoes CHINA 36 1,221 52 1,594 INDIA 23 780 16 490 INDONESIA 2 68 2 61 TAIWAN 1 34 2 61 JAPAN 0 0 0 S. KOREA 0 0 0 0 OTHERS 2 68 6 184 TOTAL 64 2,171 78 2,390
Source: Reuters (Reporting by Libby George; Editing by David Evans)