China, India soak up oil from floating storage as demand recovers

Must Read

Tankers lifting Liza Crude required to comply with Guyana’s pandemic measures

New oil producer Guyana continues to take precautionary measures at offshore installations in response to the global...

Saipem Guyana operations supported by 80 percent local workforce – Managing Director

Since starting operations in Guyana in May 2018, Italian multinational oilfield services company Saipem has established a...

E&P companies took up combined debt of $72 billion in Q2 2020 – EIA analysis

The United States Energy Information Administration (EIA) said its latest analysis has found that debt levels among...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

(Reuters) – The volume of crude stored on ships in Asia has come off the peaks seen earlier this month on a recovery in demand in China and India, trade sources and analysts said.

A total of 3.4 million tonnes (24.8 million barrels) of crude oil was discharged from floating storage into Asian markets in the past seven days, with China the top destination at 1.8 million tonnes and India second at 842,679 tonnes, according to oil analytics firm Vortexa.

Robust demand from China, the world’s top oil importer, and OPEC+ production cuts supported crude prices this month while the Brent’s contango price spread that previously encouraged traders to store oil for future sales to reap higher prices has also narrowed.

“Rising crude prices and narrowing (Brent) contango with the tightening of the crude market are nibbling away incentives of storing crude on tankers,” said Vortexa’s analyst Serena Huang.

Data from oil analytics firm Kpler showed that floating storage volumes in Chinese waters came off a peak of 35.4 million barrels on May 23 to 29.4 million barrels as of May 26.

Oil majors and trading houses have been offering Middle Eastern and West African oil stored at sea as spot prices strengthened in Asia, trade sources said. [CRU/M]

Refiners are buying on hopes of a fuel demand recovery as more countries ease coronavirus restrictions, and on anticipation that crude prices and freight rates may rise further, they said, although refining margins remained weak, limiting refiners’ ability to raise output.

“While we’re seeing signs of global demand recovery, we’re still in the early days of a long road to full recovery, and the outlook remains uncertain on whether there could be a second wave of coronavirus,” Huang said.

(1 tonne=7.3 barrels for crude conversion

- Advertisement -

Latest News

Tankers lifting Liza Crude required to comply with Guyana’s pandemic measures

New oil producer Guyana continues to take precautionary measures at offshore installations in response to the global...

Be patient: Oil does not disappear – Strengthen institutions for Guyana’s growth

The privatisation in an economy can set in motion a vicious circle. Even without corruption, rapid privatisation means that governments receive less...

Saipem Guyana operations supported by 80 percent local workforce – Managing Director

Since starting operations in Guyana in May 2018, Italian multinational oilfield services company Saipem has established a country office with 80 percent...

E&P companies took up combined debt of $72 billion in Q2 2020 – EIA analysis

The United States Energy Information Administration (EIA) said its latest analysis has found that debt levels among Exploration and Production (E&P) companies...

Costly effects of pandemic make Paris Agreement 2050 targets unlikely – Wood Mackenzie

In light of the fact that nearly US$20 trillion or 25% of global Gross Domestic Product (GDP), is earmarked for responding to...

More Articles Like This