Top oil exporter Saudi Arabia will supply full contracted volumes of crude in January to top Asian buyers, but it was unclear if sales in the first month of deliveries against new 2012 contracts would indicate much of an increase in the flow. The kingdom has boosted crude output to over 10 million barrels per day in November to the highest in decades.
That was an increase of 600,000 bpd from October, but Asian refiners say they have little appetite to take any extra barrels on top of what they are committed to buy. The only exception is China. Refinery throughput in the world's second-largest oil consumer surged to a record high of 9.22 million barrels per day (bpd) in November to ensure ample supplies of fuel during the peak winter demand season.
On a daily basis, China boosted output by nearly 480,000 bpd than the 8.74 million bpd recorded in October. "There was some extra demand from China in November because of their diesel shortage and also general demand due to seasonality, but it's not clear whether there was enough demand in Asia to match what the Saudis produced," a crude trader with a north Asian refiner said.
China's preliminary oil trade data, due Saturday, would give a better indication on how many of the additional barrels came from Saudi Arabia, but an oil trader suggested the higher demand was met by both imports and by drawing down inventories. China, and India, are exceptions in Asia. Many refiners in the region want to limit crude purchases as they pare runs to cope with dwindling oil processing profits amid a weak global demand growth outlook.