SINGAPORE: Cash Dubai came under renewed pressure in the Middle East crude market on Tuesday after sales by Chinaoil, the trading arm of PetroChina.
Chinaoil will deliver an eighth Upper Zakum cargo to Shell, traders said. In October, Chinaoil bought 47 cargoes of Upper Zakum, Oman and Dubai in the window, which strengthened the Dubai benchmark.
The physical market was quiet as many traders were away on holiday, but an oversupply of crude is likely to persist going into 2015.
"Refining margins (are) coming under more and more pressure while seasonal demand patterns are pointing to the downside," analysts at JBC Energy said in a note.
The consultancy expects global crude runs in the first quarter down by 600,000 barrels per day compared to the fourth quarter this year, "further highlighting the looming weakness in the global oil balance."
The Pacific port of Kozmino will ship a total of 24.9 million tonnes of ESPO crude oil (500,000 barrels per day) this year, up 17 percent from 2013, oil pipeline monopoly Transneft said on Tuesday.
It added that as of now, the largest crude buyers from Kozmino this year were Japan with 8.9 million tonnes, China with 5.9 million tonnes and South Korea with 3.6 million tonnes.
DME OMAN
DME Oman for February settled at $53.13 a barrel, down $2.35. This puts DME Oman at $1.89 a barrel below Dubai swaps, up from a discount of $2.63 a barrel in the previous session.
MARKET NEWS
Libya's oil output has shrunk further after blazing oil tanks at a major terminal helped push world oil prices higher and put a strain on the country's dollar currency reserves.
China's largest oil field is expected to cut production by 1.5 million tonnes, or 10.95 million barrels, in 2015, Chinese state media reported on Tuesday, as a slump in oil prices puts pressure on margins for refining crude from the ageing field.
Oil prices have halved this year, dragging on firms involved in Asian energy projects as costs remain high amid dwindling revenues, yet equity analysts continue to have a largely positive industry outlook.
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