China’s loadings of West African crude oil were set to bounce back in November from a multi-year low hit the previous month, a Reuters survey of oil traders and shipping fixtures showed, due to more importing companies there and higher refinery margins.
The boost helped press overall exports to Asia to 1.74 million bpd, a three-month high. But they remained anaemic compared with earlier in the year. In April, a spike in buying in India pressed West African bookings to Asia to 2.4 million bpd.
China, a major buyer of West African crude oil, went cold as a buyer in October amid plummeting Asian refining margins and a build up in stored oil. Buyers in Europe and the U.S. stepped in, with the latter taking more than two dozen West African cargoes for October loading.
But a bounce back in Asian refinery margins, as well as a new slate of domestic Chinese refineries allowed to import oil, helped to boost demand for November-loading oil.
“The U.S. and Europe carried the candle in October,” one trader said of West Africa loadings. “But now China is back and showing interest.” Traders said there would be more Chinese storage space free by the time the cargoes booked now would arrive, in contrast to the 4 million barrels that were stranded off an eastern port earlier this month. Additionally, China also more than doubled, to 87.6 million tonnes, the 2016 crude oil import quota for non-state companies.
Despite this, the 918,000 barrels per day (bpd) booked to load in West Africa in November for the world’s largest energy consumer was still relatively subdued compared with earlier in the year, and stood below the 2015 running average of 965,000 bpd.
The slip in November bookings to India added to a backlog of nearly 15 million barrels of unsold Nigerian oil. Angolan oil, which is favoured by buyers in China, has fared somewhat better, but prices for some grades, such as Pazflor, are still under serious pressure.