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Asia's November crude oil imports push greater, still heading for yearly fall: Russell

Asia's imports of petroleum ticked up somewhat in November, led by a recovery by leading importer China, however arrivals are still on track to be weaker this year than in 2023.

The leading crude-buying area is anticipated to import 26.42 million barrels each day (bpd) in November, up marginally from October's 26.11 million bpd and 26.24 million bpd in September, according to data compiled by LSEG Oil Research.

The continuous run of soft month-to-month imports in Asia is most likely to weigh on OPEC+'s deliberations this weekend, with the market expecting that the exporter group will when again delay its prepared increases in output.

In spite of the little November rise, Asia's crude imports are still likely to fall in 2024, confounding projections of increasing demand made by groups such as the Organization of the Petroleum Exporting Countries and the International Energy Agency.

For the very first 11 months of the year, Asia's unrefined imports were 26.52 million bpd, down 370,000 bpd from the 26.89 million bpd tracked by LSEG for the same duration in 2023.

The decline in imports stands in contrast to OPEC's most recent forecast for Asia's oil need to expand by 1.04 million bpd in 2024 from the previous year.

The exporter group's November market report said China would increase its need by 450,000 bpd, while the continent's. second-biggest importer India would see a rise of 250,000 bpd. and the rest of Asia starting with 340,000 bpd.

OPEC has been cutting its forecasts for Asia's oil demand. development every month given that July, when its report estimated Asia's. need would expand by 1.34 million bpd in 2024.

The main decrease in OPEC's forecasts has actually been in China,. where the group has gone from expecting 2024 need to lift by. 760,000 bpd in the July report, to anticipating a gain of 450,000. bpd by November.

While China's November crude imports are expected by LSEG to. can be found in at a three-month high of 11.62 million bpd, the world's. top importer is still on track to tape-record lower arrivals this. year.

For the first 10 months of 2024 China's crude imports were. 10.94 million bpd, down 3.7%, or 420,000 bpd from the same. period in 2023, according to estimations based upon customs data.

While OPEC and other forecasters are slowly capturing up. to the truth of China's weak crude imports, the market pricing. has actually reflected the dynamic for a long time.

STEADY RATES

Worldwide criteria Brent futures have been trending. weaker since reaching the high so far this year of $92.18 a. barrel on April 12.

They dropped to a 33-month low of $69.19 a barrel on Sept. 10 and have traded largely sideways ever since, ending at $72.83. on Wednesday.

When there have been spikes higher in the rate, it's. typically been driven by reports of intensifying geopolitical. tensions in the Middle East and in between Russia and Ukraine,. rather than by any shift in the supply-demand principles.

It's those fundamentals that will be front of mind for. members of the OPEC+ group when they hold a meeting on Dec. 1.

The group, which combines OPEC and allies including. Russia, is anticipated to again delay an organized boost in output.

OPEC+, which pumps about half the world's oil, had actually planned. to gradually roll back oil production cuts with small boosts. over numerous months in 2024 and 2025.

But the soft need in Asia, and especially in China, has. put the kibosh on those plans and analysts now expect any. increase in output only to occur after the very first quarter of. next year.

The views revealed here are those of the author, a writer. .

(source: Reuters)