SINGAPORE: Dubai strengthened in the Middle East crude market on Thursday as Chinaoil continued its buying spree.
Chinaoil bought 63 Dubai partials on the Platts window, leading to the delivery of four physical cargoes. This raised the total number of cargoes Chinaoil purchased to 17 in just six trading days this month.
Shell will deliver one cargo each of Oman and Upper Zakum while Chinaoil will also receive an Oman cargo from Unipec and an Upper Zakum cargo from Total, they said.
The strong Dubai crude benchmark may weigh on spot differentials. It has also raised Asian refiners' concerns that their oil costs could rise and margins weaken.
"They are making life more difficult for refiners," a trader with a North Asian refiner said. "Saudi OSPs (official selling prices) will get stronger and refining costs will rise."
The Dubai contango between the first and the third month narrowed by $1 from last month to about 20 cents, he said, likely to prompt Saudi Aramco to raise December OSPs next month.
Oil products margins were depressed on Wednesday due to the higher Dubai prices and ample supply.
TENDERS
The premium for Russian Sokol hit the lowest in more than four years after Rosneft sold a prompt cargo to Vitol at $3.50 a barrel above Dubai quotes, traders said. The deal for the cargo loading on Nov. 19-28 could not be independently verified.
DME OMAN
DME Oman for December settled at $90.51, up 28 cents, at 0830 GMT. This puts DME Oman at 21 cents a barrel above Dubai swaps, steady from the previous session.
MARKET NEWS
Vietnamese oil trading firm Petrolimex said on Thursday it has delivered the first Oman crude cargo to Sri Lanka in a term deal with refiner Ceylon Petroleum Corp (Ceypetco).
Oil tanker MV Explorer delivered 100,000 tonnes of crude from Oman to the Colombo port of Sri Lanka on Sept. 6, Petrolimex said on its website.
Iran's new development contracts will be finalised soon and presented to the cabinet for approval, its oil minister said, a sign that Tehran is pushing ahead with effort to lure foreign investors once sanctions are lifted.
Ecuador's Oil Minister Pedro Merizalde told Reuters on Wednesday that current oil prices are normal given an increase in US production, and that they will be discussed at the OPEC meeting in late November.
A tanker carrying some 1 million barrels of Iraqi Kurdish crude appears to have been lightered somewhere in the Mediterranean Sea amid an ownership dispute between Iraq and the Kurdistan Regional Government (KRG) that had stopped the vessel from delivering its load, according to Reuters tracking data.
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