SINGAPORE: The Asia-Pacific crude market was supported by strong refinery demand on Monday even as Brent's premium to Dubai swaps widened to its highest since July last year.
Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), widened 12 cents to $2.72 a barrel, the highest since July last year.
While a widening spread makes regional Brent-linked grades less attractive compared to Middle East grades, it also helps curb supply of cargoes from the Atlantic basin to Asia, thus tightening supply.
A large backlog of unsold cargoes has build up in West Africa, putting further pressure on already weak differentials in the region.
Tighter supply helped boost spot values for heavy sweet Australian grades, of which all January cargoes had been sold, traders said. Woodside sold a cargo of Vincent to an unknown buyer at around 60 cents a barrel above dated Brent, they said.
BHP Billiton sold a cargo of heavy sweet Pyrenees at a premium of more than $1 a barrel, a trader said. The buyer was not known and neither of the deals could be independently verified.
MARKET NEWS
Pertamina and Saudi Aramco are expected this week to take a major step in forming a joint venture that will include a $5 billion upgrade to Indonesia's largest refinery complex, a director at the Southeast Asian firm said.
China's October Iranian crude oil imports edged down slightly from a year earlier to their lowest level in 14 months, due in part to the outage at a petrochemical producer that suffered a fire in the spring.
A surprisingly abrupt breakdown in U.S. crude oil spreads this week has strengthened some traders' conviction of a decisive move below $40 a barrel, extending the early winter price slump.
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