SINGAPORE: The Asia-Pacific crude market held steady on Thursday with most June-loading cargoes committed, but some traders said the market could turn bearish as the contango play unwinds and crude comes out of storage.
While the Middle East crude market has remained strong with Dubai swaps flipping into backwardation this week, the Asia-Pacific market has remained sluggish due to refinery closures and higher supply from within the region and of sweet grades from the North Sea, West Africa and Latin America.
Still, solid refining margins supported the market, with June spot differentials mostly steady or slightly higher compared to the previous month.
Some traders said the July-loading market could turn bearish as the change in the Dubai market structure may trigger a release of oil that had been put into storage when the market was in contango.
Supply of Australia's Northwest Shelf (NWS) condensate would fall to three cargoes in July from four in the previous month, according to a preliminary loading programme.
MIMI, a joint venture between Mitsui and Mitsubishi, was scheduled to load a July 5-9 cargo, while Woodside will load a July 15-19 cargo and BP a July 23-27 cargo.
A June loading programme initially indicated three cargoes that month, but one cargo was later added to the programme.
The result of a tender by ONGC to sell a cargo of Russian Sokol crude loading July 8-14 was expected on Friday. Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, widened 18 cents to $1.63 a barrel.
In Japan, refiner Cosmo Oil shut its 120,000-barrel-per-day No.2 crude distillation unit (CDU) at the 220,000-bpd Chiba refinery for scheduled maintenance on May 2, a company spokesman said. Indonesia's energy minister said on Thursday he would seek President Joko Widodo's approval for the country to rejoin OPEC seven years after leaving the oil exporters' group.
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