SINGAPORE: The Middle East crude market strengthened on Thursday, with DME Oman back at a premium to Dubai, although ample supply and weak margins continued to weigh on sentiment.
"There are currently no bullish signs," a trader said. "We'll have to see if it can rise further."
Crude supply to Asia has increased as a drop in Brent's premium to Dubai has opened the arbitrage window for inflows of grades from other regions such as Africa and Latin America. Russia has also stepped up ESPO crude exports to Asia after a domestic refinery outage.
"October is a turnaround season in Europe, so more cargoes from Europe and Africa can flow to Asia," a second trader said.
Asian refiners have little appetite for additional crude, however, as margins remained weak.
Middle Eastern grades are likely to find it hard to compete as Gulf producers have set their monthly prices too high, the second trader said.
On the Platts window, Mercuria bought seven of the eight Dubai partials that traded on Thursday. Shell and Chinaoil sold to Mercuria mostly at $103.30 a barrel.
Traders are watching the results of an ESPO tender re-issued by Rosneft, which will close later on Thursday. The Russian producer did not award a prior tender as it received bids as low as around $1.50 a barrel.
Tasweeq has issued its monthly tender to sell deodorised field condensate (DFC) and low sulphur condensate (LSC), which will close on August 19 with bids valid until August 21.
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