10m barrels of US oil en route to Asia

HOUSTON/NEW YORK: Oil tankers carrying around 10 million barrels of the United States crude were en route to Asia, according to shipping data and trade sources, as US producers take advantage of favourable prices to ship to the region while the Organisation of the Petroleum Exporting Countries (Opec) ponders further supply cuts next week.

At least eight tankers were in transit, said sources and the shipping data in Thomson Reuters Eikon showed, with one of them carrying the first ever cargo of Southern Green Canyon crude purchased by Japanese refiner Cosmo Energy. Another contains the first Alaskan North Slope cargo to arrive in Asia in eight months.

Opec members meet next week to discuss extending a global supply cut, but the possibility of the US supply eating into their market share will be a challenge. While member countries have largely restrained their supply, they have remained intensely focused on keeping market share with Asian refiners. But relatively cheap US crude has buoyed exports to Asia.

Traders expect that May US crude exports could reach around one million barrels per day, with a sizable portion of that going to Asia. Last week, US crude exports touched 1.09 million bpd, the third highest on record, according to US government data.

“We expect that momentum to continue when (Dakota Access Pipeline) opens and as more Permian production hits Corpus Christi docks,” said Sandy Fielden, director of oil and products research at Morningstar, of the exports.

US oil production had risen by 10 per cent to 9.3 million bpd since the middle of last year, according to the Energy Information Administration.

Meanwhile, The Philippine economy grew at its slowest pace in more than a year in the first quarter on weaker government spending, but strong exports and domestic consumption suggest the Southeast Asian country remains poised to raise rates this year.

It was the slowest economic expansion since firebrand President Rodrigo Duterte took office nearly a year ago, sending Manila’s equities down more than one per cent and the peso to a oneweek low. Reuters