SINGAPORE: The Dubai price flipped to a premium in the Middle East crude market on Friday after Chinaoil increased buying, while differentials for Murban weakened.
Chinaoil, the trading arm of PetroChina, bought a total of 74 partials at around $84.30 a barrel, equivalent to about 24 cents above Dubai swaps.
Aggressive buying by Chinaoil this month has strengthened the cash Dubai price, pushing spot differentials for Upper Zakum, Oman and Al-Shaheen to multi-month highs.
There has been strong demand on the back of a slide in global oil prices with Brent touching a four-year low this month.
Still, refining margins continued to slide. Complex refining margins in the Singapore hub have averaged $5.63 over the past week, compared with $6.35 last month.
Differentials for Abu Dhabi's flagship grade Murban fell to 10-20 cents a barrel below its official selling price (OSP), traders said. Earlier this week, the grade traded at a 15 cent premium, following a big cut in its OSP.
"We're already trading for peak winter season. If values don't pick up now, then when will they?" a trader said.
Most other Middle East grades were seen in discount, traders said, as refiners increasingly took advantage of Brent's narrow premium to Dubai crude and relatively low freight rates to purchase arbitrage cargoes from the Atlantic basin.
PetroIneos, a joint venture involving PetroChina, is ramping up imports of West African crude to its Grangemouth refinery in Scotland, according to shipping fixtures, booking at least 5 million barrels since the start of October amid lower prices and technical problems at the plant.
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