SINGAPORE: The Middle East crude benchmark Dubai strengthened on Wednesday on a strong bid from Gunvor even though no partials were traded during the window.
Cash Dubai's discount narrowed by about 10 cents from the previous day to about $1.35 a barrel, the strongest since August.
Differentials for remaining February-loading cargoes, including Qatar Marine and light sour grades such as Murban and Das, weakened as most Asian refiners have completed their purchases.
Qatar Marine's discount to its official selling price may have widened to 30-40 cents, while premiums for Murban may have dropped to 40-50 cents, a trader said.
Still, Thailand's PTT did not award its sour crude tender due to a lack of demand from domestic refiner IRPC.
Traders eyed an ESPO tender from Surgutneftegaz for price direction. The producer offered four ESPO cargoes for loading on Feb. 18-22, 21-25, 25-29 and Feb. 26-March 1 in a tender to close on Wednesday.
Iraq has signed deals worth $1.4 billion to ship about 160,000 barrels per day of crude to two Indian refiners in 2016, sources said, upping the ante in a race among exporters to cement their market share in Asia - the world's top oil consuming region.
"The battle is only going to intensify with the return of Iranian barrels from the second half of 2016," said Virendra Chauhan, an oil analyst at Energy Aspects.
Iraq's State Oil Marketing Organization (SOMO) signed a deal with India's top private refiner Reliance Industries to supply about 100,000 barrels per day (bpd) of Basra Heavy in 2016, said one of the sources who was close to the matter.
SOMO also signed a term deal with Indian Oil Corp to export about 60,000 bpd of Basra Heavy, likely meant for IOC's new Paradip refinery, the sources said. The two firms already have a contract for Basra Light.
South Korea is eager to increase the diversity of its oil suppliers by looking at US and Iranian supplies as more exports from those countries become available, the South Korean Ministry of Trade, Industry and Energy said on Wednesday.
The country's refiners will look at importing supplies of US condensate should the WTI price drop to a discount of between $4-$6 a barrel to Dubai, the ministry said in a statement, citing the refineries.
Still, the spread between February WTI and Dubai remained narrow at $3 a barrel, combining with strong freight rates to curb US crude exports to Asia.
DME OMAN
DME Oman for February settled at $31.82, down 13 cents, at 0830 GMT. This puts DME Oman at $1.33 a barrel below Dubai swaps, up from a discount of $1.48 in the previous session.
MARKET NEWS
Royal Dutch Shell's proposed $53 billion takeover of rival BG Group will work even if future oil prices are in the low $60s a barrel, it said on Tuesday in announcing another $5 billion cut in spending next year to weather low oil prices.
Indian refiners processed 2.5 percent more crude oil in November from a year earlier, preliminary government data showed on Tuesday.
US oil and natural gas producer ConocoPhillips has sold its 50 percent stake in a joint venture with Russian state oil company Rosneft, a ConocoPhillips spokesman said.
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