SINGAPORE: The Asia-Pacific crude market held steady on Thursday, although differentials could find support from Brent's narrowing premium to Dubai and lower inflows of West African grades.
Differentials for Russia's ESPO crude held steady after Surgut sold three 730,000-barrel cargoes at $1.50-$1.80 a barrel above Dubai quotes.
Premiums for the sour grade have ranged between $1.20 and $1.80 a barrel over the last couple of weeks, according to Reuters data.
Differentials failed to improve despite lower supply expected in October. A total of 21 cargoes are planned for export in the month, compared to 25 in September, a loading programme showed.
Brent's premium to Dubai crude fell below $1 a barrel for the second time this month to the lowest level in over four years, as a glut of oil in the Atlantic basin and in Asia weighed on the European benchmark.
Brent-Dubai Exchange of Futures for Swaps (EFS) narrowed 9 cents to $0.94 a barrel.
Still, the economics of bringing West African cargoes to Asia were not seen as lucrative due to high freight rates and as traders waited for differentials to fall further.
Asian refiners facing poor profits from processing crude into oil products have lowered run cuts over the past two months.
Still, improving naphtha and middle distillates cracks have pushed overall profitability higher in the last week or 10 days.
Complex refining margins in the Singapore hub have recovered to average around $4.40 a barrel over the past week - the same level as in July, but lower than in the two previous months.
"With winter season starting, there may be some additional demand. But the export margins still don't look good," a Japanese trader said.
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