SINGAPORE: The Middle East crude market gained some support after Saudi Arabia and Abu Dhabi cut monthly prices slightly more than expected, although excess supply in other regions weighed on Asia.
"There's oversupply in West Africa and the North Sea," a trader said. "The narrow EFS should affect demand for Middle East crude too."
Saudi Aramco has cut the September price for its Arab Light grade for Asian customers by 40 cents a barrel from August to a premium of $1.65 a barrel to the Oman/Dubai average, versus expectations of a 20-30 cents cut in a Reuters survey.
Weak naphtha and gasoline cracks weighed on prices for lighter grades, traders said.
Abu Dhabi National Oil Company (ADNOC) set the July retroactive selling price for its benchmark Murban crude at $109.50 per barrel, ADNOC said on Tuesday.
July Murban OSP's differential to Dubai fell by 27 cents a barrel from the previous month, a slightly bigger cut than the 10-20 cents reduction expected by some market participants. Weak gasoil cracks and competition from higher Russian ESPO crude supply likely prompted the steeper price cut, traders said.
Three more ESPO cargoes were added to the September programme with Rosneft, Gazprom and Lukoil selling one each.
Rosneft has likely re-issued a tender to sell an ESPO cargo for Sept. 25-28 loading after receiving bids at around $1.50 a barrel to Dubai quotes, they said.
Brent's premium to Dubai edged up 2 cents to $1.68 a barrel for September after touching the lowest in nearly four years earlier this week. October's spread was at $2.28, up 3 cents.
The weak Brent has opened up the arbitrage window for crude from West Africa, Latin America and the North Sea to head to Asia.
Thai energy firm PTT has bought crude from Nigeria and Colombia, origins it does not normally turn to, a source with direct knowledge of the matter said.
PTT has bought a partial cargo of Colombian Castilla crude and a cargo of Nigerian Qua Iboe, which will arrive in September, the source said.
Besides PTT, Taiwan's Formosa Petrochemical has also bought a cargo of Angolan Girassol in a rare move.
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