05-09-2016

Boosted by trade houses, more West African oil to sail east in September

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The amount of West African crude oil heading east in September is expected to reach a five-month high, driven in part by trading houses, according to a Reuters survey of shipping fixtures and traders.

At least 60 cargoes, carrying the equivalent of 1.9 million barrels per day (bpd), are expected to make the journey, up from 1.685 million bpd in August and the highest on a bpd basis since April.

Increased bookings to India and Indonesia, and by trading houses, offset a decline in China’s buying.

Falling freight costs, which hit multi-year lows over the summer, helped encourage traders to ship oil east. A deepened contango, in which future prices are above current levels, also encouraged traders to take their time securing buyers.

Sources said trading houses including Trafigura, Gunvor and Statoil were holding cargoes that they plan to send east, while others such as Vitol had booked vessels to load without a clear destination.

Indonesia’s buying, with at least three cargoes of Nigeria’s Escravos, related in part to tenders that state oil company Pertamina issued earlier this year. Glencore and Chevron booked the cargoes for Pertamina.

A cargo of Equatorial Guinean crude was set to sail for South Korea, while other cargoes will head for Australia and Singapore.

Source: Reuters

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