SINGAPORE: Spot grades in the Middle East crude market were expected to trade at a premium when trading for April-loading cargoes begin this week, traders said on Wednesday.
A combination of robust refinery demand and attractive official selling prices (OSP) by Middle East producers would likely keep crude differentials for ADNOC grades like Murban and Das blend at a premium, they said. Murban may begin trading at a 20 cent premium, said one trader.
Asian refiners, currently assessing their crude requirements, may be keen to conclude trading for April cargoes before the Chinese New Year at the end of next week, which could support prices, a few traders said.
Lower oil prices have allowed Asia's refiners to rebuild margins after years of low profits amid relative high crude prices.
Complex refining margins in the Singapore hub have averaged around $8.50 a barrel in the past week, up from around $7.50 a barrel last month.
However, this may be as good as it gets for refiners, argues Reuters columnist Clyde Russell. The strength in refinery margins will lead to higher output of fuels across the region, as refineries return from annual maintenance and spare capacity is put to use.
*OSP
Kuwait set the official selling price (OSP) of its crude oil sales to Asian buyers for March at $4.10 a barrel below the average of Oman/Dubai quotes, a trader said on Wednesday.
TENDERS
Traders were awaiting a tender issue by Tasweeq to sell April-loading al-Shaheen. The grade may be supported amid a strengthening of DME Oman.
DME OMAN
DME Oman for April settled at $55.59, down 30 cents, at 0830 GMT. This puts DME Oman at 80 cents a barrel below Dubai swaps, up from a discount of $1.27 in the previous session.
MARKET NEWS
Kuwait's oil minister expects crude prices to rise in the second half of 2015, possibly to $60 a barrel by year-end, local newspaper al-Rai cited him as saying on Wednesday.
The head of Kremlin-controlled energy giant Rosneft targeted OPEC and the United States on Tuesday as he launched a broadside at the forces behind the oil price crash that has hit Russia's economy hard.
Fuel oil supply into Asia from the West is expected to slip in March, following heavy inflows in February due to shipment delays, shipping data showed.
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