Only five-to-eight cargoes of Angolan crude for next month are still for sale out of 29 scheduled lots, according to traders specializing in West African oil, who asked not to be identified discussing private information. That’s a better selling pace than the last couple of months, they said.
The February cycle still has another week of trading left before March barrels come to the market. By comparison, in the December cycle between 11 and 12 cargoes were still looking for buyers just a day before the January supplies were due to start trading.
The main reason for the quicker sales is better demand from Asia, according to one of the people. The new Chinese mega-refiner Shandong Yulong Petrochemical Co. has boosted sales alongside established buyers from the region — state refiners like Unipec, Sinochem, Indian Oil Corp. and Indonesia’s Pertamina — the person said.
Yulong purchased two shipments of Angolan supply from Sonangol earlier this month.
Shippers said that a jump in the cost of chartering a supertanker to move oil from the Middle East to China reflected concerns over tighter tanker supplies. Those worries stem from Cosco, China’s biggest shipping line, being added to a US military blacklist, and a move by Shandong Port Group to restrict the handling of sanctioned tankers.
China is likely to replace affected supplies with non-sanctioned barrels from elsewhere, Fearnley Securities said in a note on Jan. 8, pointing to the Atlantic as a potential source given that the region’s oil production is forecast to rise “significantly” this year.
