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Crude oil pipeline

Nigeria, Ghana oil exports jump on China demand in January

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Preliminary reports on shipments of West African oil, mainly from Nigeria and Ghana to China showed surge in January.

The Reuters survey of shipping fixtures and traders showed that the surge is boosting overall fixtures heading east to their highest in at least 14 years.

China’s loading are expected to jump by more than 20 per cent from December to more than 1.5 million barrels per day in January, the survey showed.

The figure is the highest barrel-per-day total to sail for China since September, and is some 37 per cent above the same month last year.

Traders said China’s appetite was whetted in part by the first batch of government import quotas for 2018, which were issued in late December, but announced in November. This prompted some companies to book cargoes early in order to arrive as quickly as possible.

Energy Aspects said a large amount of destocking in the fourth quarter, which amounted to a total drawdown of some 40-60 million barrels in China, also prompted strong demand from the world’s second-largest oil consumer.

“There’s certainly a large pull from China,” said Michal Meidan, Asia analyst with Energy Aspects. “Demand has been good and the runs have been high. They need the crude.”

The bookings helped to propel overall fixtures heading east to 2.39 million bpd, a record since Reuters tracking began in 2004. The previous record was in April 2015 at 2.343 million bpd, when India booked more than 1 million bpd.

Still, there is fierce competition for Chinese and other Asian buyers, with U.S. crudes increasingly edging into the market, often at the expense of West African grades.

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