Oil refiners across Asia are apparently showing reluctance to soak up increase crude output from Saudi Arabia.
According to a report from news agency, Reuters, China, Singapore and other Asian based oil refining countries are reluctant to buy-up the 600,000b/d increased output from the Middle East kingdom which is now producing some 10mb/d of crude oil.
There seems no apparent logic to the boost in output, given that the majority of Saudi oil is shipped to Asia, where refiners in a variety of countries are reported as not having requested the additional oil and are already facing reduced profit margins as global oil and lube demand slows.
The new supply is some 60% of predicted global growth for 2011 and about half of the estimated 2012 demand growth requirements. China's is currently the largest buyer, although recent shipments are only a relatively small amount of the output as China's overall crude import cargoes slip. According to Reuters, profits in Singapore for refining Dubai crude have slumped significantly and an improvement is unlikely at the start of next year with Saudi boosting premiums as well as output, thus reducing production margins.