SINGAPORE: The Middle East crude market held firm on Wednesday as robust demand from Chinaoil flipped cash Dubai into a slight premium for the first time in two months, even as Brent crude futures hit a new more than two year low.
A stronger Dubai has also depressed gasoil margins in Asia to the lowest in more than two months.
Dubai crude trade heated up on the Platts window as Chinaoil stepped up purchases, snapping up 90 of the 92 partials traded, the highest daily volume ever.
Wednesday's trades led to the delivery of five physical cargoes, bringing Chinaoil's total purchase to 13 cargoes, or 6.5 million barrels, in five sessions this month, traders said.
"It's only the 8th of the month and he has already taken 13 cargoes," a trader with a Western firm said, referring to Chinaoil's trader Zhang Yufeng who has taken charge of Middle East crude trading.
Chinaoil is the trading arm of state-owned PetroChina .
In Wednesday's trade, Mercuria and Shell will deliver an Upper Zakum crude cargo each while Unipec will deliver two Oman crude cargoes, traders said. BP will deliver a Dubai crude cargo, they said.
Dubai partials were traded at $90.10 a barrel close to settlement, equivalent to 8 cents above Dubai swaps, the highest since Aug. 8.
*TENDERS
Unipec bought three of the five ESPO cargoes offered by Rosneft in a tender at $2-$2.20 a barrel above Dubai quotes, traders said. The cargoes are for Nov 2-5, 20-23 and 24-27 loading. Shell bought a cargo to load on Nov. 15-18 at a premium slightly higher than $1.80 a barrel while a fifth cargo for Nov. 28-Dec. 1 will be re-offered in a new tender, they said.
*DME OMAN
DME Oman for December settled at $90.23, down $1.17, at 0830 GMT. This puts DME Oman at 21 cents a barrel above Dubai swaps, up from an 11-cent premium in the previous session.
*MARKET NEWS
The US Energy Information Administration trimmed its forecast of world oil demand growth next year and made even deeper cuts in its outlook for OPEC production, the latest signs of a shift toward surplus supplies next year.
For OPEC crude oil output, the EIA cut its forecast by 300,000 bpd to 29.24 million bpd in 2015. In September, OPEC pumped nearly 31 million bpd.
Iran Oil Minister Bijan Zanganeh said on Tuesday that OPEC has no plans to hold an emergency meeting to discuss the recent slide in oil prices, Iran's oil ministry news agency Shana reported.
US East Coast refiners rushed to buy crude from Azerbaijan and West Africa this week as slumping European oil prices and buoyant US cash crude markets re-opened an increasingly rare arbitrage opportunity, traders said.
European Union sanctions on Iran's main oil tanker firm NITC have been annulled after the EU failed to appeal against a court ruling that ordered the measures to be lifted, the shipping company said.
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