Indian state refiner IOC took nearly half the total for India.Shipments of West African crude to Asia are set to reach a record high in August, driven by a surge in demand from Indian refiners, who will take more oil from the region than at any time since mid-2015.
According to a Reuters survey of shipping fixtures and traders, some 890,000 barrels a day of West African crude will sail to India, compared with 600,000 bpd in July and almost double last August's 460,000 bpd.Total loadings for Asia will rise to 2.586 million bpd this month from 2.44 million bpd in July and 2.176 million bpd last August.Indian state refiner IOC took nearly half the total for India, while the privately held Reliance Industries took three cargoes, and HPCL and BPCL took one each.Of the 15 cargoes that will go to India, at least 9 will hold Nigerian grades, including Qua Iboe, Agbami and Usan.China's daily intake dropped to its lowest since May this year at 1.419 million bpd from 1.571 million bpd in July, reflecting a modest slowdown in refinery intake and less favourable shipping economics.Some 60 per cent of crude that will head to China is Angolan.The premium of Brent crude futures LCOc1 to benchmark Dubai futures 1OQc1 has widened this month to almost $2.00 from less than $1.00 in late July, while the premium to US crude futures CLc1 has also crept out towards $6.00 from near $2.50 a month ago.The relatively strong performance of Brent futures to other regional benchmarks means it has been cheaper for Asian buyers to take in the likes of US shale or other Middle East grades at the expense of typical West African grades.However, the drop in the value of the currencies against the US dollar of a number of key commodity importers, such as China and India, over the course of August might prompt a decline in flows in September and October, as buyers feel the pinch of an unfavourable foreign exchange rate."Despite the general weakness in emerging-market currencies, oil market players are relaxed about the potential adverse impact on global oil demand, especially now that the dollar is getting slightly weaker again," PVM Oil analyst Tamas Varga said.
"This upbeat mood will probably change if the dollar strengthens again and this strength proves to be prolonged."India has seen the value of a barrel of oil rise by nearly 56 per cent in the last year and China a rise of 47 per cent in local terms, compared with the 41 per cent rise in the dollar value of Brent LCOc1 to around $74 a barrel.
Thomson Reuters 2018