This week, state and private oil processors including Reliance Industries Ltd., Indian Oil Corp. and Bharat Petroleum Corp. bought more US West Texas Intermediate crude than normal, according to traders who asked not to be identified as they’re not authorized to speak to the media. The main driver was more favorable prices for the grade, which have weakened relative to Middle East benchmarks, they said.
Things are going to change for Nayara Energy, a large Indian refiner, in which Russia’s Rosneft has a sizable stake. Nayara Energy was named specifically among entities to be sanctioned by the EU. The Indian company condemned the sanctions as “unjust and unilateral”, echoing New Delhi’s official response to the sanction package, which said the Indian government did not support that package.
The reason for these expectations is the decision by OPEC+ to keep returning supply to the market. OPEC+ is meeting later today and most observers appear to have assumed it will announce yet another monthly hike of 411,000 barrels daily for July. It is this expected hike that, according to the Reuters refining sources, will drive lower prices for Saudi oil.
Chinese demand also registered a decline in terms of LNG from state-run companies, with Bloomberg reporting that China re-exported over 280,000 tons of LNG in April to date, clocking in as the highest single-month re-export volume on record. The re-export volume represents nearly 8% of total imports for April.