SINGAPORE: Trading for August-loading cargoes in the Asia-Pacific crude market was slow to get under way as traders assess supply from main producers in the region to gauge direction in a market weighed by low refining margins.
Traders mostly expected differentials to be flat or slightly lower than the previous month, despite refiners returning from seasonal maintenance.
"No one is buying at the moment. Everybody is just watching and waiting," a Singapore-based trader said.
Malaysian supply in August will be slightly higher than the previous two months, as some grades that weren't exported in July will be carried over into August, a trader said.
State-owned Petronas has yet to offer any cargoes to the market, but Labuan, Kikeh, Bunga Kekwa and Penara are expected to be available, the trader said.
The remaining two cargoes of Australian Northwest Shelf (NWS) condensate loading in July have been sold by Mitsui and Woodside at lower differentials than the previous month, traders said.
Woodside may have sold its cargo to South Korea's Samsung Total, while Mitsui may have sold to Jurong Aromatic Complex in Singapore, traders said. The price may have been slightly more than $3 per barrel below Dated Brent, traders said, but details of the deals were unclear.
Previously two July-loading NWS were sold at a discount of around $2.50 per barrel. Condensate demand in Asia is expected to increase as new splitters in South Korea and Singapore ramp up production, but appetite has been largely muted until now.
Five NWS cargoes will be loaded in August, including two cross-month cargoes at the beginning and the end of the month.
Russia's Rosneft sold an ESPO cargo loading Aug. 13-18 in a tender to Shell at $4.85 per barrel above Dubai quotes, in line with a previous cargo loading early-August sold by Surgut, traders said.
Rosneft did not award a second cargo due for loading Aug. 3-8 in the tender.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, narrowed 39 cents to $4.51 per barrel.
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