SINGAPORE: The Middle East crude market received a little boost from Saudi Arabia on Tuesday after the world's top exporter raised prices for oil sales to Asia on better demand.
Saudi raised the February official selling prices (OSPs) for all grades it sells to Asia by 55-70 cents, levels largely within expectations. The price hikes were based on a narrowing contango in the Dubai market structure and improved refining margins. Asia's crude demand also held firm last month.
The hikes for Arab Light and Medium were slightly larger than expected, traders said, likely because Saudi factored in a narrowing Oman/Dubai spread which occurred in the last five trading sessions of last month.
"The narrower Oman/Dubai spread did come into play this month and they really took it all," said an analyst.
Nine Dubai partials were traded on Tuesday, with Vitol and Gunvor buying from Shell, Unipec, Mercuria and Chinaoil at $48.50-$48.70 a barrel.
In global markets, oil extended losses to touch fresh 5-1/2-year lows, following a 5 percent plunge in the previous session as a slew of bearish factors added to supply woes.
DME OMAN
DME Oman for March settled at $49.39, down $2.65, at 0830 GMT. This puts DME Oman at $1.84 a barrel below Dubai swaps, against a discount of $2.06 in the previous session.
REFINERY
Taiwan's CPC Corp has shut a crude unit and a gasoline making unit for planned maintenance, and will idle a naphtha cracker in the fourth quarter for turnaround, industry sources familiar with the matter said on Monday.
MARKET NEWS
Two of Japan's biggest buyers of Iranian crude, JX Nippon Oil & Energy Corp and Showa Shell Sekiyu KK, are set to keep their purchases from Tehran largely steady in 2015, their top officials said.
A Libyan warplane from forces loyal to the internationally recognised government bombed a Greek-operated oil tanker anchored off the coast, killing two crewmen in an escalation of hostilities between factions vying to rule the country.
West African crude oil exports to Asia are set to fall to around 1.69 million barrels per day (bpd) in January from 1.93 million bpd planned for December, the lowest since August a Reuters survey showed on Monday.
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