Asia is heading for America to buy more oil after the extension of OPEC cuts

by **RamblerNash** Mon Dec 04, 2017 1:44 am

Asia is heading for America to buy more oil after the extension of OPEC cuts

03/12/2017

Economy News _ Baghdad

Asian refiners have not wasted time after OPEC and Russia decided to extend production cuts until the end of 2018 and asked for more oil from the Caribbean and Gulf of Mexico in a move that would lead OPEC and Russia to lose market share.

Production cuts aimed at curbing supply and price support have been in place since January and were due to expire in March 2018, but Opec, in cooperation with producers from outside Russia including Russia, agreed on Thursday to extend the cuts until the end of 2018.

However, crude supplies remain abundant. Even before the cuts were announced on Thursday, refineries in Asia, the world's largest consumer, began to inquire about oil shipments from the Gulf of Mexico and the Caribbean in general, mainly from the United States, Mexico, Venezuela and Colombia, according to shipping companies.

"There have been inquiries from Asia about tankers from the Gulf of Mexico and the Caribbean," said a broker specializing in long-haul oil shipments. Now that we have learned that OPEC cuts will be extended, inquiries will be diverted to orders. " The broker declined to be named because he was not authorized to speak to the media.

The biggest problem for OPEC and Russia, along with cut-off, was that it led to increased US production and market share growth.

Cargo shipments from the Gulf of Mexico and the Caribbean to customers in Asia from China, Japan, South Korea, Taiwan and Singapore rose from half a million barrels per day in January, when OPEC cuts to more than 1.2 million bpd began in November, And December.

The biggest export increase for Asia came from the United States, with oil production rising.

According to US government data, US production hit a record 9.68 million last week.

"The real winner (of the cuts) is the American producers," says Matt Stanley of Freet Investor Services for fuel trading in Dubai.

Energy consultancy Rastad Energy expects US production to fall to 9.9 million bpd this year, approaching the level of Russia and Saudi Arabia, the world's top producers.

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