Asia buys up African, Brazilian oil as shipping costs fall
USO•Asian buyers have bought African and Brazilian crude at lower prices as tanker freight rates fell about 50% from October peaks. Delivered African and Brazilian crude costs to China have declined $5 to $10 a barrel from last month.
1. Buyers book Atlantic crude
Unipec bought two cargoes of Congolese Djeno crude last week at discounts of about $22 a barrel to dated Brent on a free-on-board basis. Unipec and South Korea’s SK Energy provisionally chartered tankers to load West African crude for Asia in December at lower freight rates.
2. Freight rates retreat
Freight rates for VLCC, Suezmax and Aframax tankers have fallen about 50% from their peaks last month, Baltic Exchange data showed. Asian refiners held back purchases in recent weeks because of high costs, while more vessels became available after delivering oil.
3. African, Brazilian grades ease
An eastern Chinese independent refiner bought 1 million barrels of Angolan Plutonio crude for late December or early January delivery at about $15 above ICE Brent, compared with premiums above $20 a fortnight earlier. Brazilian Tupi crude last traded at a premium of $7 to $8 a barrel for January arrival, versus premiums near $20 last month.
