The amount of West African crude oil heading east in September is expected to reach a five-month high, driven in part by trading houses. At least 60 cargoes, carrying the equivalent of 1.9mb/d are expected to make the journey, up from 1.685mb/d in August and the highest on a b/d basis since April, Reuters reported.
Trading houses such as Trafigura, Gunvor and Statoil have cargoes planned for the east, others like Vitol had booked vessels to load without a specific destination, informed Ecofin Agency’s Oil and Gas.
Increased bookings to India and Indonesia have offset a decline in China’s buying. Indonesia purchased at least three cargoes of Nigeria’s Escravos, through tenders that state oil company Pertamina issued earlier this year, with cargo bookings by Glencore and Chevron. Furthermore, a cargo of Equatorial Guinean crude was set to sail for South Korea, while additional shipment will head for Australia and Singapore.
Falling freight costs, at a multi-year low over the summer, encouraged traders to ship oil east. A deepened contango, in which future prices are above current levels, also encouraged traders to take their time securing buyers.