SINGAPORE: The Asia-Pacific crude market stayed under supply pressure on Monday as growing regional production faced competition from excess West African barrels.
Supply in the region is growing as Australia and Malaysia are marketing new grades, Balnaves and Kimanis, while Vietnam has excess Su Tu Den to sell in the November spot market.
A narrow spread between Brent and Dubai, falling freight rates and spot differentials for West African cargoes have also kept the arbitrage window for competing grades from the Atlantic Basin to Asia wide open.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, narrowed 35 cents to 72 cents a barrel for October. November EFS was at $1.16, down 29 cents from the previous session.
Output from Libya has also risen to 870,000 barrels a day, adding to global supply.
Russia also stepped up exports to Asia for a third month by adding three more ESPO cargoes to its October programme.
Rosneft offered one cargo for loading on Oct. 12-13 in a tender that closed on Friday with bids valid until Wednesday. The highest bid was at a premium of 90 cents a barrel, traders said, although Rosneft is yet to award the tender.
Gazprom has an additional cargo loading end-October while Lukoil also has an extra cargo, traders said.
Asia will also receive more supply from the United States as its exports of ultra light oil, or condensate, are set to continue for a third month, with two cargoes due to load in September for shipment to Europe and South Korea.
Mitsubishi Corp has sold a cargo of condensate to load in the middle of this month to Koch Supply & Trading which will likely head to Rotterdam, people with direct knowledge of the matter said.
Another cargo to load later in September was sold by Mitsui & Co to South Korea's top refiner SK Energy, they said.
* TENDERS
PV Oil offered three 350,000-barrel cargoes of Chim Sao for loading on Nov. 4-8, 16-20 and 26-30 in a tender that will close later on Monday with bids valid until Thursday.
PV Oil also offered 200,000 barrels of Rang Dong for loading on Nov. 23-29 in a tender that will close on Tuesday with bids valid until Wednesday.
Russia's Rosneft sold a Sokol cargo for Nov. 13-22 loading to Japanese refiner JX Nippon at $4.30 a barrel above Dubai quotes, slightly lower than the $4.50-a-barrel premium fetched in a tender last month. The deal could not be independently verified.
South Sudan government has sold 3 million barrels of Dar Blend to Chinese buyers at discounts between $11 and $12 a barrel to dated Brent, traders said.
REFINERY
Top Asian refiner Sinopec Corp said it had shut its 250,000-barrel-per-day (bpd) Gaoqiao refinery in Shanghai for more than two months for an overhaul.
MARKET NEWS
Fresh U.S. and EU sanctions imposed on Moscow will bring an abrupt halt to exploration of Russia's huge Arctic and shale oil reserves and complicate financing of existing Russian projects from the Caspian Sea to Iraq and Ghana.
Indonesia expects crude output from Exxon Mobil Corp's Cepu oil block to peak in July or August next year, an official from the country's oil and gas regulator said on Monday.
Independent storage operator Oiltanking's new facility in Karimun, Indonesia will be ready by the third quarter of 2015, and will bank on long-term Asian oil demand to fill up capacity, a senior company official told Reuters.
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