West African oil exports to Asia to hit 17-month high in December

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LONDON, DECEMBER 1, 2016 – West African crude exports to Asia are set to hit 2.1 million barrels per day (bpd) in December, the highest level since July 2015, driven by pricing that made the grades more attractive when compared with supply from the
Middle East.

According to a Reuters survey of shipping fixtures and traders, China will load 1.23 million bpd, the highest since September 2014, while Indonesia snapped up a number of cargoes
of Nigerian crude. Ehsan Ul-Haq, principal consultant with KBC said the drop in the Brent-Dubai price spread DUB-EFS-1M, which fell below $2 per barrel in November for the first time since late 2015, had helped spur demand.

A narrower spread makes crude oil priced off Brent, which includes West African grades, more competitive compared with Middle Eastern or Russian oil that are priced in relation to
Dubai crude futures. Angola’s medium sweet grades have also been in high demand in China as its refineries run full steam to prepare for New Year celebrations at the end of January.

Analysts said concern about production cuts in the Middle East, which produces competing medium and sour crudes, had also helped spur Asian interest in building stocks of Angolan oil. “They are a bit worried about the Middle East,” Ehsan Ul-Haq, principal consultant with KBC. “They still see West Africa as a reliable supplier, and Angolan in particular.”

Indonesia booked seven cargoes including Nigeria’s Agbami, Escravos and Bonny Light as well as Congolese Coco. Traders said more reliable loading schedules in Nigeria, due to pipeline repairs, had helped attract interest, but added that some of these cargoes could be sold on to other buyers in Asia.

Other occasional buyers such as Thailand booked cargoes while India, which looks the best prices in regular tenders for oil across various supply regions, took 15 cargoes as it did in
November.

COUNTRY     December     BPD '000s  November  BPD '000s
             cargoes                 cargoes   
 CHINA       40           1,225      38        1,203
 INDIA       15           460        15        475
 INDONESIA   7            215        1         32
 TAIWAN      2            61         4         127
 JAPAN       0            0          0         0
 S. KOREA    0            0          0         0
 OTHERS      5            153        2         63
 TOTAL       69           2,084      60        2,115

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