SINGAPORE: The Middle East crude market remained weak on Tuesday with DME Oman's differential to Dubai swaps staying in discount for a second straight session amid plentiful supply.
A supply overhang in the Atlantic Basin has weighed on Brent and widened the arbitrage window for excess cargoes to head to Asia, weighing on the east's demand outlook ahead of trade for October-loading barrels.
Brent's premium to Dubai recovered from the lowest in nearly four years as excess supply in the Atlantic Basin is slowly clearing. The EFS for September was at $1.66, up 44 cents from Monday's close, while October EFS edged up 29 cents to $2.25.
Reflecting this trend, Taiwanese refiner Formosa Petrochemical has bought a rare cargo of Angolan crude via a tender, trade sources said.
Formosa bought 950,000 barrels of Girassol from a Chinese trader which will be delivered on Oct. 1-20, they said. The price was not immediately known.
Traders are waiting for the new monthly official selling prices (OSPs) from Saudi Arabia and ADNOC to gauge sentiment for October-loading barrels.
Flagship Arab Light crude could fall by 20-30 cents a barrel, down for a second straight month, a Reuters survey of five refiners and traders showed. Arab Medium and Heavy could fall by 10-35 cents each.
ADNOC is expected to trim the OSPs differentials to Dubai for Murban and Upper Zakum by 10-20 cents.
DME OMAN
DME Oman for October settled at $103.65, down $0.12, at 0830 GMT. This puts DME Oman at 14 cents a barrel below Dubai swaps against a discount of 1 cent in the previous session.
*MARKET NEWS
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