SINGAPORE: The Middle East crude market held steady on Wednesday, as focus turned to trading for February cargoes and price announcements from major producers in the region.
Qatar set the November retroactive official selling price (OSP) for its Qatar Marine grade at $74.35 a barrel, the lowest since September 2010.
The price puts the discount for Qatar Marine to Dubai crude at $1.98, down 25 cents from the previous month.
The OSP for Qatar Land was set at $76.20, which puts the grade at $0.13 below Dubai crude, unchanged from the previous month.
Saudi Arabia is expected to announce OSPs for its February exports later Wednesday or on Thursday.
A few January-loading cargoes could still be unsold, including Das Blend and Basra Light, traders said.
Refining margins in the region have improved as the price of crude has tumbled in recent months. The profit margin for processing a barrel of Dubai crude in the Singapore refining hub has averaged close to $8 a barrel over the last week, up from $7.40 on average last month.
But for now, the surplus refining capacity is preventing Asia's refiners from rebuilding margins on the back of weaker crude prices.
While there may well be a seasonal boost to margins from the
northern winter, refinery profits are likely to remain under pressure as long as the market remains oversupplied with fuels.
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