Crude Oil Buying Activity in Asia up Amid Falling Prices in the US

 Crude Oil prices have been falling for the past week with Brent Crude down 5 cents (0.1%) at USD 68.98 per barrel on Wednesday after falling 0.7% on Tuesday. The falling prices have given a boost for the buying activity in Asia with the South Korean and Chinese refiners buying at least 5 million barrels of US Mars Crude loading in September in order to take advantage of the falling prices.



Other grades including the West Texas Intermediate (WTI) and West Texas Light (WTL) which also have traction in the east are also being booked in Asia.

Another reason for Asian countries showing more interest in US high-Sulphur crude is the ongoing production restraints being faced by the Middle East Producers and delay in the return of Iranian Crude Oil to the international markets.

During the second quarter of 2021, Crude Oil supplies in the Asia Pacific region were balanced with demand outlook uncertain due to surge in COVID related complications in India which further restricted the public movement and limited the industrial activities for a larger part of the second quarter. Whereas China reported surge in Brent Crude offtakes from Iran. Asia’s Crude demand surged in June as the mass vaccination programmes eased the restrictions in several parts of the region and the market sentiments continued to strengthen. As a ripple effect, the Crude Oil price trend in India observed continuous gains after gradual downfall in April. Price of Brent Crude reached USD 71.23 per barrel in June, showing an increment of USD 9.53 per barrel within the second quarter of 2021.  

Major sales in Asia include a refiner in South Korea which has bought 3 million barrels of sour grade and Sinopec that has taken 2 million barrels. There remains at least 2 million to 4 million barrels of Mars Crude that can be traded to Asia.

As per ChemAnalyst, “the buying activity will continue to be competitive in Asia with the prices declining in the US due to the fears of the Delta Variant. The Oil supply in Asia has also seen a rise since India has started selling Oil from its Strategic Oil Reserves. This might also have a downside effect on the prices and could support the ongoing rise in the buying sentiment in Asia.”



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