SINGAPORE: Cash Dubai remained at a discount of about $1 to Dubai swaps in the Middle East crude oil market on Wednesday, unchanged from the previous session, despite robust demand from Chinaoil.
The trading arm of PetroChina bought four Oman cargoes from Unipec in a busy window session which saw 120 deals, traders said. This brings Chinaoil's total tally for the month to 14 cargoes.
Cash Oman is now on a par with Dubai, down from a small premium earlier, as purchases of Oman partials by Chinaoil from Unipec and Shell closed the gap between the two markers, traders said.
The June-August Dubai spread has also narrowed slightly to $1.30 a barrel after Unipec bought several August partials. Chinaoil will deliver an August Upper Zakum to Unipec following the deals.
Open interest volume for DME Oman surged on Wednesday close to 6000 lots but the benchmark weakened against Dubai instead as more traders sold, trade sources said.
Even though Chinaoil's purchases have little impact on Dubai cash prices so far, it has tightened supplies for June-loading cargoes which will start trading next week, traders said, adding that this could lift spot premiums for medium grades.
Light grades are supported by tighter Murban supply as ADNOC has trimmed exports since the new Ruwais refinery came onstream, they said.
Indian Oil Corp (IOC) bought another 1 million barrels of Basra Light for May loading via a tender last week from Lukoil, a trader said. The price, based on Dubai, worked out to be more than 60 cents a barrel to its OSP, he said.
The state refiner earlier bought 2 million barrels of the Iraqi crude from Unipec at 50-60 cents a barrel above OSP for May loading.
Brent's premium to Dubai rose to just above $2 a barrel for June, making grades priced on the Middle East benchmark more attractive for buyers.
DME OMAN
DME Oman for June settled at $56.33 a barrel, up 66 cents, at 0830 GMT. This puts DME Oman at 89 cents below Dubai swaps against a discount of 68 cents in the previous session.
MARKET NEWS
Saudi Arabia has stepped up crude production to its highest rate on record, feeding unexpectedly strong demand from foreign refiners and increased capacity at home.
Oil Minister Ali al-Naimi told reporters late on Tuesday that the Kingdom produced some 10.3 million barrels per day (bpd) of crude in March, a figure that would eclipse its previous recent peak of 10.2 million bpd in August 2013, according to records going back to the early 1980s.
World oil prices could be $5 to $15 a barrel lower than forecast next year if oil-related sanctions against Iran are lifted, the US government's energy agency said.
Royal Dutch Shell has reached a deal to buy BG Group in the first major oil industry merger in more than a decade, seeking to extend its lead in gas production and close the gap on market leader ExxonMobil.
Crude oil exports from Nigeria were set to reach roughly 1.81 million barrels per day (bpd) in May, according to traders and provisional shipping lists, slightly above the initial April export plan that included around 1.795 million bpd.
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