SINGAPORE: Basra Light crude's premium for March hit the highest in just over a year on expectations of a cut in the grade's price marker, trade sources said on Tuesday.
The grade's official selling price (OSP) for March is expected to drop by $1 per barrel in line with market changes and this allows buyers to increase the premiums they pay on top of the OSP.
Traders are also more bullish in a contango market as they can store unsold oil and sell it later at higher prices.
"The fact that the contango gives sellers a backstop to store definitely helps," said a trader.
Phillips66 sold 2 million barrels of March-loading Basra Light at a premium of about 60 cents a barrel above its OSP to an unknown buyer, traders said.
Petco, the trading arm of Malaysia's state oil firm Petronas , sold 2 million barrels each to Vitol and Unipec in a tender at premiums between 50 and 60 cents a barrel, they said.
Prior to the tender, Vitol also bought 2 million barrels of Basra Light from Petco, traders said.
Oman strengthened further on Tuesday, narrowing its spread with Dubai, following two trades on the window.
Mercuria bought a Dubai partial from Unipec at $43.70 a barrel, while Chinaoil sold an Oman partial at $45.90, a trader said.
TENDERS
Russia's Surgutneftegas offered 400,000 tonnes of ESPO Blend crude for loading from the Pacific port of Kozmino in March in a tender to close on Jan. 27, said industry sources. The cargoes are for loading from Kozmino on March 14-18, 21-25, 24-28 and 27-31.
More details emerged for Tasweeq's condensate tender. There was no low-sulphur condensate (LSC) awarded for a second month due to maintenance, traders said. SK Energy bought two deodorised field condensate (DFC) cargoes at premiums of about $1 a barrel to Dubai, they said.
PRICES
DME Oman for March settled at $45.84 a barrel at 0830 GMT, up 39 cents. This puts DME Oman at $0.53 a barrel below Dubai swaps against a discount of $1.19 in the previous session.
Dubai has set its official differential to Oman futures for April at a discount of $0.90 per barrel, the Dubai Department of Petroleum Affairs said on Tuesday.
REFINERY
Japanese oil refiner Taiyo Oil Co is starting up two crude distillation units (CDUs) and other secondary units at its 118,000 barrels per day (bpd) Shikoku plant after an unplanned shutdown at the weekend due to a power blackout.
South Korea's S-Oil Corp plans to shut two crude units, two secondary units and a condensate splitter for planned maintenance between February and November at its 669,000 barrels-per-day (bpd) Onsan refinery, industry sources said.
South Korea's Hyundai Oilbank Co Ltd will shut its No.2 280,000-barrel-per-day (bpd) crude distillation unit between late April and early June for maintenance, a company spokesman said on Tuesday.
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