From Reuters via gCaptain:
Oil traders and major producers are lining up a flotilla of carriers to
ship more U.S. crude to Asia in December than in nearly two decades as
higher prices, supported by OPEC’s proposed supply cuts, offer a rare
opportunity to boost sales to the region.
A 40-year U.S. ban on crude exports was lifted in 2015 but only a few
cargoes have shipped during a global glut in supply. The Organization
of the Petroleum Exporting Countries last week agreed to its first
supply cut in eight years as the cartel sought to end the two-year glut.
As peak winter demand kicks in, the difference between benchmark
crude prices in the United States, Asia and Europe has widened to the
most since August and opened up the trade route.
“I think Asia is going to pull lots of U.S. oil,” one trader said on
condition of anonymity as he was not authorized to speak publicly on
trading. “There’s lots of interest in this.”
Trading houses and oil majors are lining up ships that could take as
much as 7 million barrels to Asia, traders and brokers said. But actual
shipments may be less as increased supplies make exports less
profitable.
So far, more than 2 million barrels of crude have been chartered to
China in December by Chinese state-owned oil traders PetroChina
(601857.SS) and Unipec, three sources with knowledge of the matter said
on Friday. They requested anonymity because they were unauthorized to
talk to the media.
Those two cargoes would fall short of the record volume of oil
departing to China, reached in January 1997, by the equivalent of just
one vessel, according to U.S. government data.
“We haven’t exported a lot previously to Asia because there’s a lot
of costs, a lot of logistics and there’s always been OPEC,” said Carl
Larry, director of business development for oil and gas at Frost &
Sullivan.
“We’re fairly new to this export game, but once we figure it out,
we’ll make it work. The U.S. looks to be pushing out as much as we can.”
The flow of oil will help drain U.S. inventories, which are some 32.2
million barrels higher than the same time last year and a concern for
OPEC....MORE
