SINGAPORE: DME Oman's premium to Dubai edged down in the Middle East crude market on Monday as excess supply and weak China economic outlook weighed on prices.
Traders are awaiting Qatari al-Shaheen and condensate to commence trading in order to assess Asia's demand for November-loading cargoes.
Sellers are pinning their hopes on recovering refining margins and a cold winter to absorb surplus oil although spot differentials for al-Shaheen were likely to remain in discounts amid the supply glut, traders said.
The Qatari heavy sour grade was traded at a wide range of discounts between 30 cents and $2.30 a barrel to Dubai quotes for October.
Qatari condensate could also come under pressure as alternative light sour Murban had traded at about $2 a barrel to Dubai quotes for November, a trader said. Spot premiums for deodorised field condensate (DFC) have held above $3 a barrel in the past four months on robust demand from new splitters in Asia.
More competition could come in the form of ultra light oil, or condensate, from the United States. Exports are set to continue for a third month, with two cargoes due to load in September for shipment to Europe and South Korea, two sources said.
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, the 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.
Russia has 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 has yet to award the tender.
Gazprom has an additional cargo loading end-October while Lukoil also has an extra cargo, traders said.
TENDERS
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.
*DME OMAN
DME Oman for November settled at $95.36, down $1.65, at 0830 GMT. This put DME Oman at 92 cents a barrel below Dubai swaps against an 80 cent discount in the previous session.
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
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