High prices could prompt refiners to draw down inventories, tightening supply buffers even as the Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia gradually ease supply cuts. Spot crude prices in Asia are a leading indicator for global markets as several of the world’s top importers are located in the region. Asian refiners also typically buy oil two months in advance, earlier than other regions. “Arbitrage from West Africa and Europe to Asia could decline and increase demand for regional barrels,” a North Asian refining source said, referring to oil from Asia Pacific, Russia, and Middle East. “If everybody only buys baseload crude, (prices in) the market may be toppish soon,” a second North Asian refining source said.

Source: The North Africa Journal June 16, 2021 08:15 UTC