Asian buyers boost physical oil as pandemic punishes futures

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Robust demand from China and India has bolstered physical crude oil prices from around the world, traders said, in contrast to the futures market that is wrestling with over-supply and demand uncertainty wrought by COVID-19.

FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee/File Photoare trading around $40 a barrel, having recovered from more than two-decade lows in April, but still under pressure from concerns a second wave of the pandemic will reduce fuel use.

Their activity has helped to lift differentials in the last two weeks for Russian Urals, Norway’s Johan Sverdrup, Caspian Azeri BTC and CPC Blend, as well as West African and Brazilian grades. Russian Urals achieved the highest premiums to dated Brent in three months and oil arbitrage shipments to China may increase soon, two traders said, especially for cargoes loading at the end of November and in December.“China has been nearly absent from the Mediterranean oil market,” a trading source told Reuters. “Now it is back, asking questions and definitely considering buying for volumes loading from end-November and later.

“China and India are the answer,” said one trader for a refinery in Europe, where poor margins and a stalled economic recovery have meant crude grades the continent usually favours are heading east.

 

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Climate Change might have something to do with that. Clean Energy is so much better. More jobs, too. ClimateAction

How DARE they neglect VIRTUAL oil?!!

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