SINGAPORE: The Asia-Pacific crude market remained under pressure on Wednesday with several February cargoes still unsold, although a drop in production in Vietnam next year could limit supply in the region.
Most grades were sold at slightly higher premiums this month, supported by the high costs of bringing arbitrage cargoes to the region. However, supply remained ample with little improvement in Asian demand.
PetroVietnam expects revenues to drop by almost a third next year when it plans to cut Vietnam's crude oil output by around 3 percent to 16.8 million tonnes (337,000 barrels per day), due to highly volatile oil prices.
The company produced 17.37 million tonnes of crude oil this year, beating its annual output target by 7.2 percent, it said in a statement.
Brent crude prices edged towards $57 a barrel on Wednesday as weak Chinese manufacturing data and demand concerns outweighed supply disruptions in Libya.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, fell 5 cents to $1.75 a barrel, the lowest since Nov. 18.
Differentials for Russia's ESPO crude fell after Rosneft sold two 730,000-barrel cargoes due to load in February in a tender at around $1.80-$1.90 a barrel above Dubai quotes, traders said.
The two cargoes were initially offered in a tender for a total of five cargoes, but were subsequently re-tendered. The three remaining cargoes were sold in the initial tender at a premium of $2-$3 a barrel, the traders said.
ESPO premiums fell from around $3 a barrel hit earlier this month, according to Reuters data.
The buyers were not known, and the deals could not be independently verified.
MARKET NEWS
The Obama administration on Tuesday bowed to months of growing pressure over a 40-year-old ban on exports of most domestic crude, taking two steps expected to unleash a wave of ultra-light shale oil onto global markets.
A fire raging for almost a week at Libya's biggest oil port of Es Sider has destroyed up to 1.8 million barrels of crude and damaged seven storage tanks, causing total damage of $213 million, a top oil official said on Tuesday.
OPEC's oil supply fell by 270,000 barrels per day (bpd) in December to a six-month low as fighting cut Libyan output, offsetting record Iraqi southern exports and stable Saudi Arabian production, a Reuters survey found.
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