SINGAPORE: Over supply continued to weigh on the Asia-Pacific crude market on Tuesday although signs of improving middle distillate margins could support differentials for Russia's ESPO grade, traders said.
Profits from processing a barrel of crude continued to slip, with complex refining margins in the Singapore hub averaging about $5 a barrel over the last two weeks, down from $6.35 a barrel last month.
Still, a pick-up in margins for jet fuel and an anticipated increase in heating demand from North Asia could support distillate-rich grades such as ESPO.
The result of a tender by Surgut to sell two cargoes loading Dec. 11-15 and Dec. 16-20 had yet to emerge, although one trader said he expected premiums to pick up for cargoes loading towards the end of the month.
The grade has traded about $1.60-$1.90 a barrel above Dubai quotes for cargoes loading early-December.
More detail emerged on PV Oil's tender to supply Su Tu Den on a term basis between January and June next year.
The tender was awarded to Unipec and Chevron at about $0.75 a barrel above Dated Brent, traders said, although that could not be independently verified.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, narrowed 7 cents to $1.73 a barrel.
REFINING
India's top private oil refiners are taking precautions but do not anticipate any impact on their operations from cyclone Nilofar, which is expected to hit the country's west coast on Saturday, officials said.
MARKET NEWS
Oil major BP's third-quarter results took a hit from falling oil prices and a sharp drop in income from Russia as Western sanctions led to a slump in earnings from its local partner, Kremlin-controlled Rosneft.
OPEC is unlikely to lower its oil production ceiling when the group meets in November, a senior Iranian oil official said, in comments that reduced the likelihood of any collective OPEC action to support prices.
An engineering and construction unit under China's Sinopec Group has started building pipelines for Iraq's Maysan project that will help raise the oilfield's production to 460,000 barrels per day (bpd) by 2016, an industry website reported on Tuesday.
Russian pipeline monopoly Transneft is gradually resuming oil loadings at Russian ports after a suspension due to bad weather, Interfax news agency quoted a company spokesman as saying on Tuesday.
Total has agreed to sell stakes in several oil fields in Norway to PGNiG Upstream International for $317 million, the French company said on Tuesday.
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