SINGAPORE: The Middle East crude market jumped on Thursday with spot October cargoes trading at premiums at more than one-year highs on robust demand in Asia.
Strong refining margins, Saudi supply cuts and reduced arbitrage flows to the east have boosted demand for Middle East crude in Asia.
"The market is on fire," a Singapore-based crude trader said.
DME Oman was priced at a premium to Dubai swaps for the first time in four months.
DUBAI SPERADS: Dubai was further supported by Brent's strength after the European marker's price spreads for the first three months flipped into backwardation for the first time in more than three years.
Dubai followed, with intermonth spreads for September to December at 1-3 cents in backwardation.
TRADES: Spot premiums for light crude produced in Qatar and Abu Dhabi touched their highest in more than a year, buoyed by strong demand from Japan.
Fuji Oil has bought four cargoes to load in October, double the volume from the previous month, probably to prepare for peak winter demand ahead, one source said.
These include two cargoes of Murban at 30 to 35 cents a barrel above its official selling price and two cargoes of Qatar Land at premiums of 35 cents to just over 40 cents a barrel to its OSP, sources said.
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