LAUNCESTON, (Australia): Asia has been the laggard of crude oil demand growth this year, but the world's top-importing region looks set for a modest rebound in imports in August.
Usually when Asia's imports strengthen it's a China-led story, but for August the big improvers in demand are India and Japan, the region's second- and third-biggest buyers.
India is on track to record its highest imports in five months in August, with commodity analysts Kpler estimating the South Asian nation will land about 4.33 million barrels per day (bpd), slightly more than the 4.31 million bpd forecast by Refinitiv Oil Research.
Whatever the final outcome, what is certain is that India's oil imports have rebounded this month from a 12-month low of around 3.4 million bpd in July.
The recent weakness in India's imports was caused by the double whammy of a renewed outbreak of the coronavirus pandemic and high crude oil prices, which caused refiners to defer purchases. Both negative factors have eased somewhat in recent weeks, while the coronavirus is still prevalent in India, the economy is re-opening, leading to higher fuel demand. Crude oil prices peaked so far in 2021 in early July, with benchmark Brent futures reaching a high of $77.84 a barrel on July 6, and then have trended lower to end at $71.93 on Wednesday.
Much of the crude arriving in Asia in August would have been purchased prior to, and around the peak of crude prices, with the exception of India, where refiners tend to buy spot cargoes with a much-shorter delivery window given the country's geographic proximity to the Middle East producers.