Swift OPEC+ Cuts Revive Premiums in Asia Physical Oil Market - Bloomberg:
Swift and bold output cuts by OPEC and its allies are boosting prices of physical oil barrels in Asia as supply tightens.
Premiums for a wide-ranging variety of crude from Russia’s ESPO, Abu Dhabi’s Upper Zakum and Qatar’s Al-Shaheen have increased significantly in the Asian spot market since OPEC+ started reducing output this month in-line with its pledge to cut almost 10 million barrels a day. Supplies of more sulfurous oil from the Middle East that are favored by a majority of Asian refiners should begin to tighten due to the production curbs.
Demand is recovering in major oil consumers China and India, led by a rebound in gasoline and diesel consumption. Chinese refiners are seeing profits from turning crude into fuels, even as processors across much of the region including Singapore face negative margins. In spite of that, buyers are continuing to scramble for cargoes after Saudi Arabia, Kuwait and the U.A.E. said they would reduce contractual supplies from June as they press ahead with planned curbs to support a market rebalancing.
Swift and bold output cuts by OPEC and its allies are boosting prices of physical oil barrels in Asia as supply tightens.
Premiums for a wide-ranging variety of crude from Russia’s ESPO, Abu Dhabi’s Upper Zakum and Qatar’s Al-Shaheen have increased significantly in the Asian spot market since OPEC+ started reducing output this month in-line with its pledge to cut almost 10 million barrels a day. Supplies of more sulfurous oil from the Middle East that are favored by a majority of Asian refiners should begin to tighten due to the production curbs.
Demand is recovering in major oil consumers China and India, led by a rebound in gasoline and diesel consumption. Chinese refiners are seeing profits from turning crude into fuels, even as processors across much of the region including Singapore face negative margins. In spite of that, buyers are continuing to scramble for cargoes after Saudi Arabia, Kuwait and the U.A.E. said they would reduce contractual supplies from June as they press ahead with planned curbs to support a market rebalancing.
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