NRGO - How Much Longer Can Asia Keep Supporting The Global Oil Markets?

• The big theme in the oil market has been the battle between East vs West. Strong Asian demand vs. falling demand in the West.
• As western countries continue to suffer from rising COVID case counts, Asia demand has improved to being higher y-o-y.
• On the surface, one would think Asia's crude buying has been very elevated to justify the current support for the market, but that's not actually the case.
• China continues to destock floating storage and the recent buying is still below that of 2018/2019. The rest of Asia is seeing improving demand but with limited supplies, refineries are having to bid up for crude supplies.
• The battle between the East and West is clearly illustrating whose winning the battle for oil market dominance. Recovering demand coupled with limited supplies has Asian buyers bidding up the oil. This has legs, in our view, and will likely keep the oil market well supported so long as demand holds up in the East.

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