(Ecofin Agency) - Reports have indicated that the amount of West African crude oil to be shipped to the east in September is expected to reach a five-month high, partially caused by trading houses.
According to a Reuters’ survey of shipping fixtures and traders, no less than 60 cargoes, carrying the equivalent of 1.9 million barrels per day, are expected to be shipped, compared to the 1.685 million bpd in August and the highest on a barrel per day basis since April.Trading houses such as Trafigura, Gunvor and Statoil have cargoes that they plan to send to the east, others like Vitol had booked vessels to load without a perfect destination.
Indonesia purchased at least three cargoes of Nigeria's Escravos, through tenders issued by state oil company, Pertamina, earlier this year. Glencore and Chevron helped booked the cargoes for Pertamina.Equatorial Guinea on the other hand, has a cargo of crude heading for South Korea, while other cargoes will set sail for Australia and Singapore.
The decline in freight costs and the deepened contango where future prices are above current levels has helped encourage traders to take their time in seeking for buyers as well as ship oil to the east, Reuters reports.
On September 27th members of the Organization of Petroleum Exporting Countries (OPEC) are to hold informal talks in Algeria.Given the current supply glut in the global market which started since OPEC in 2014 let go of its role of setting output to bolster prices, there has been doubts as to whether a freeze will suffice or whether production cuts will be necessary.
Current oil prices have discouraged the market for thousands of small offshore and non-conventional oil producers and weakened economy.