Wednesday , December 1 2021

Asia turns to US for oil in energy crisis



[ad_1]

PRICE APPROACH:
Oil trade under Brent futures contract gives the US a huge advantage in pricing, increasing the rush to secure cheap fuel as winter approaches

Asia’s demand for U.S. oil is rising as the energy crisis drives up prices for other crudes, priced according to the global Brent futures contract.

Some traders said that Chinese and other Asian buyers have purchased supertankers of US oil for delivery next month and are looking for more for December.

Most buyers are looking for US grades, which have recently fallen to their lowest levels in more than a year, with an added incentive after Beijing placed import quotas of millions of tons.

Photo: Reuters

Elisabeth Murphy, North America upstream analyst at ESAI Energy LLC, said the wide gap between Brent and West Texas Intermediate (WTI) oil futures boosted US crude oil exports.

WTI has been trading for at least US$3 per barrel under Brent since August, a discount that generally supports US crude exports.

Asia’s growing appetite for US crude comes after a widespread recovery in road-fuel and freight activity and before a winter that is likely to see more oil demand from the power sector.

This also happens in response to the global supply gap in fossil fuels, which is causing higher prices.

Earlier, Brent crude surpassed $85 a barrel on Friday following months of production cuts by OPEC and its allies in response to the COVID-19 pandemic.

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman reiterated the need for OPEC and its allies to take a gradual and incremental approach to reviving production.

With natural gas trading close to $200 a barrel in Europe, the consensus among analysts is that global oil demand will rise another half a percentage point as companies rush to secure any fuel that can be used as a substitute. , from diesel to fuel oil and crude oil.

Murphy expects an additional demand of around 700,000 barrels per day of crude oil from Europe and Asia this winter due to the switch from natural gas to oil.

He said U.S. crude oil exports should reach 3.1 million to 3.2 million barrels per day this month, from about 2.6 million last month, aided by a broad WTI discount for Brent.

With the US entering winter soon, increased demand overseas will mean more competition for US refineries. Hurricane Ida caused a loss of 30 million barrels in local supply, and some of the production will only return next year.

Comments will be moderated. Save comments on the article. Abusive and obscene language comments, any personal attacks or publicity will be removed and the user will be banned. The final decision will be at the Taipei Times’ discretion.

[ad_2]
Source link