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Wednesday, January 19, 2022

Asia-Pacific Crude-Higher supply, slower Chinese demand may weigh

Asia-Pacific Crude-Higher supply, slower Chinese demand may weighSINGAPORE: The Asia-Pacific crude market remained supported on Wednesday by robust refining margins, although increasing supply and slower Chinese demand could hurt.

Malaysia plans to export six or seven cargoes of its new Kimanis grade in May, compared with six in April, while Vietnam’s PV Oil may load an extra cargo of Chim Sao in end-May in addition to the three cargoes sold in a tender already, traders said.

Petronas began showing May-loading cargoes of Labuan and Miri to potential buyers, although no deals were heard done.

Chinese state refiners could process less crude oil in the second quarter as domestic demand is dented by tax hikes and a slowing economy, according to traders.

Sinopec had aimed to raise its crude runs by 5 percent between April and June, from about 59 million tonnes or 4.8 million barrels per day (bpd) in the first quarter, but that is now unlikely, according to two refinery sources.

A plan to process about 20 million tonnes in March also looks difficult to achieve, one of the sources said.

In February, throughput at Chinese refineries fell 2.5 percent from a year earlier to 39.70 million tonnes.

More arbitrage supply was due in Asia, after BP last week loaded the Al Salmi VLCC at Hound Point headed for South Korea. Trafigura may also be planning another VLCC fixture to South Korea after amassing cargoes this week.

Petroleum Brunei had yet to award a tender that closed on Tuesday to sell a Kimanis cargo loading May 20-24, a trader said.

PV Oil offered two 300,000-barrel cargoes of Ruby crude loading May 5-12 and May 18-25 in a tender that closes March 24.

Japan’s customs-cleared crude oil imports fell 11.6 percent in February from the same month a year earlier to 3.47 million barrels per day (bpd), the Ministry of Finance said on Wednesday.

MARKET NEWS

Japan’s benchmark crude oil price fell to a near six-year low in February as imports dropped 11.6 percent from the same month a year earlier, according to data released by the Ministry of Finance on Wednesday.

Mexico’s state-owned oil company Pemex could double crude exports to South Korea to 10 million barrels by the end of the year, the head of the company’s trading arm said in an interview.

Copyright Reuters, 2015

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