SINGAPORE: Spot differentials in the Asia-Pacific crude market are expected to stay unchanged or weaken slightly from last month, when trading for February cargoes gains pace next week, traders said on Thursday.
Lower refining margins and stronger supply in Asia combined with competitive pricing for Middle East crude will likely weigh on regional grades.
"It's hard to see any upside with more supply coming," said a trader.
Malaysia is ramping up production of its new Kimanis crude, while Vietnam has doubled output of its Su Tu Den crude.
Vietnam is expected to produce more than 17 million tonnes of crude oil this year (341,000 barrels per day), beating its annual target by at least 5 percent, state oil and gas group Petrovietnam said.
Refining margins in the Singapore hub have fallen to average about $5.70 over the last week following a spike in November when margins averaged about $7.40 a barrel.
Petronas has set the price factor for Malaysian Crude Oil (MCO) for December at $4.80 per barrel, down 90 cents from the previous month, a source with direct knowledge of the matter said on Thursday.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, widened 7 cents to $2.32 a barrel.
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Global demand for OPEC crude in 2015 is expected to fall to the lowest level in more than a decade and far below current output, the group said, pointing to a hefty supply surplus without OPEC output cuts or a slowdown in the US shale boom.
India's Essar Group will sign a long-term crude oil import deal with Russia's Rosneft during President Vladimir Putin's visit to New Delhi on Thursday, government and industry sources said on Wednesday.
Russia and Venezuela stand to lose the most from sliding oil prices, with the latter facing a growing risk of default because of its large fiscal deficit and high state spending, Moody's said in a report.
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