Oil refiners in Asia are reportedly scooping up North Sea produced crude as OPEC members curb production.
According to data collected by Bloomberg, North Sea crude exports to Asia will likely hit a new record-high of 12 million barrels this month.
If oil tankers currently scheduled to export crude to Asia set sail as planned, about 40 percent of the January supply underpinning the Brent benchmark will wind up in Asia, Bloomberg said.
Data complied by Bloomberg shows that monthly shipments of Brent, Forties, Oseberg and Ekofisk crude to Asia hit a record high of 10 million barrels in October compared to a previous average of 6 million barrels per month for all of 2016.
Refiners in Asia are turning to North Sea crude suppliers now that OPEC and some non-OPEC producers have begun curbing production.
OPEC members agreed in December to shave production down by about 1.2 million barrels per day while a group of non-OPEC members agreed to cut about 580,000 bpd.
As OPEC and non-OPEC members curb supplies, demand for crude in China continued to post gains late last year.
According to an analysis of government data conducted by S&P Global Platts, China’s apparent oil demand in November 2016 hit the second highest level on record to 11.44 million bpd.
Refinery throughput in November 2016 averaged 11.18 million bpd, a 3.9 perncet year-over-year increase.
S&P said the refinery throughput boost was likely tied to “an uptick in runs toward the end of the year, as well as fewer refineries shut for maintenance.”
China’s imports of key oil products climbed to a six-month high of 1.1 million bpd in November thanks to higher light distillate inflows.
S&P said that, moving into early 2017, refiners in China are “expected to ramp up throughput operations to prepare for the Lunar New Year holidays.”
The U.S. Energy Information Administration said earlier this month that it expects Brent crude oil prices to average $53 per barrel in 2017, up from the agency’s previous forecast of $51 per barrel.
The EIA expects Brent crude prices to continue growing into the next year and hit an average and $56 in 2018.
Brent crude prices rose to $55.69 per barrel about an hour after Tuesday’s opening bell, up from a close of $55.23 per barrel on Monday.