Singapore December 09 2021: Buyers in the world’s biggest crude consuming region aren’t asking for extra supplies from Saudi Arabia for next month following the kingdom’s price hike and signs of weakening in the physical market.
At least three Asian refiners will take normal volumes from the Saudis for January-loading cargoes, according to company officials who asked not to be identified as the information is private. Buyers sometimes seek additional cargoes on top of term shipments when Saudi Arabian oil is deemed as cheaper than competing grades, or when their demand surges.
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OPEC+ lifts crude output by 500,000 b/d in November amid omicron uncertainty
Companies should be informed of their allocations later this week. For December, buyers that Bloomberg spoke to sought their usual volumes.
Balances for the first half of 2022 have softened after producers in the OPEC+ coalition unexpectedly went ahead with an output increase for next month, according to Morgan Stanley. In the spot market, differentials are also being pressured after some prompt cargoes of Russia’s ESPO crude failed to find buyers while ONGC Videsh Ltd. sold a cargo of Sokol for February loading at the lowest premium
Profits from turning crude into fuels were barely positive for spot crude purchases that’ll arrive after the peak winter demand season, according to traders participating in the market. Spring refinery maintenance also typically takes place from March, which is when those cargoes would land, they said.
