US oil exports: WTI fob up amid Asian demand

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WTI fob prices rose against Ice Brent prices this week amid ample Asia Pacific demand and lower freight costs to Europe.

The discount of WTI loading 15-45 days forward at the US Gulf Coast decreased by 78¢/bl against November Ice Brent this week to a $1.40/bl discount on 27 July. Waterborne WTI rose against WTI Houston at around a 39¢/bl premium compared to 30¢/bl the week before.

The dirty Aframax rate from the US to Europe reached a three-month low, falling by $1.26/bl to $3.65/bl, its lowest since 27 April.

The US to China dirty tanker rate rose by 19¢/bl to $4.01/bl from a week earlier as China's demand for US oil increases.

Two August-loading VLCCs of WTI were purchased late last week, with one destined for South Korea and the other for India. A buyer in Thailand purchased WTI and WTL to round a VLCC, marking the second August-loading cargo headed for Thailand.

Similarly, at least two more VLCCs were heard sold to buyers in Singapore and South Korea, with another two possibly headed for Thailand and India.

Meanwhile, Asia-Pacific demand for September-loading WTI started earlier than usual, with 2mn bl cargoes of WTL already heard trading to buyers in South Korea and China.

China's crude production has reached highs not seen since 2015, with production up 120,000 b/d from January-June to 4.2mn b/d. The country's crude stocks are at a near-30-month high, according to data from oil analytics firm Kpler.

China plans more stimulus measures for its construction sector by issuing special bonds and conducting wider reconstruction in rural areas, which could boost diesel demand.

Separately, Nigeria's export terminal for its medium-sweet Forcados crude remains shut due to a suspected leak that was reported earlier this month. Shell's local subsidiary SPDC has given no guidance on a possible timeline for restart. The outage could help incentivize further US crude exports to both European and Asia-Pacific destinations.

By Nathan Steffen