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South Korea, Chinese refiners snap up US sour crude: Sources

South Korea, Chinese refiners snap up US sour crude: Sources

Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Oklahoma, US on Apr 21, 2020. (Photo: Reuters/Drone Base)

NEW YORK: South Korean and Chinese refiners have snapped up at least 5 million barrels of US Mars crude loading in September, taking advantage of lower prices in recent weeks, industry sources said.

Ongoing production restraint by Middle East producers and a delayed return of Iranian barrels to international markets have also contributed to the rise in Asian buying interest for US high-sulphur crude, the sources said.

One South Korean refiner has bought 3 million barrels of the sour grade while Unipec, the trading arm of Asia's largest refiner Sinopec, has taken at least 2 million barrels, they said.

Unipec has chartered the supertanker Cosnew Lake to load sour crude from Louisiana on Sep 23, according to two sources and Refinitiv Eikon data. The company is also looking to fix a Suezmax vessel for departure in early September, shipbrokers said.

"US crude has become quite cheap relative to the rest of the world and US exports have picked up because of it," said Scott Shelton, an energy specialist at United ICAP.

Mars Sour crude's discount to US crude futures widened in late July to the most since April 2020, but has since narrowed due to the rise in export demand, traders said. Mars traded at the smallest discount to benchmark futures in six weeks on Tuesday.

 

Source: Reuters/zl

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