Brent attractive to Asian Refiners A little bit outdated but interesting
The Energy Report for Friday, February 3rd 2012B
Yet with euro refineries shuttering, it is Asia that is really supporting Brent crude. Bloomberg New Reports that, "we are seeing more North Sea or Brent oil being shipped to Asia than at any time in the past eight years as prices fall to the lowest levels in 15 months compared with Middle East alternatives." Bloomberg says that Brent traded at $2.41 a barrel more than Dubai crude on Jan. 13, the smallest difference since October 2010. Companies led by BP Plc and Vitol Group have sent at least 8 million barrels of North Sea oil to Asian ports since mid-December, equivalent to six days of U.K. production. That’s the most for any month since 2004, data from Galbraith’s Ltd., a London-based shipbroker, show."
Bloomberg reports that rising production in Libya, refinery closures from the U.K. to Switzerland and a drop in U.S. gasoline demand have created a surplus that is weighing on the price of low-sulfur, or sweet, crude produced in the North Sea and West Africa. That is making it profitable for companies to transport the raw material more than 16,000 miles (25,700 kilometers) to Asia, where demand is outpacing the rest of the world." Bloomberg points out that while still more expensive than Middle East grades, Brent’s narrowing premium is making it more attractive to Asian refiners because it’s cheaper and easier to process into higher-value products such as gasoline and diesel.