SINGAPORE: The Middle East crude benchmark Dubai strengthened on Wednesday due to robust demand from Chinaoil.
Cash Dubai's discount to swaps narrowed close to 20 cents after the trading arm of PetroChina bought 10 Dubai partials during the Platts MoC process from Shell and Unipec. Shell will deliver an al-Shaheen crude cargo to Chinaoil following the deals, traders said.
This is the third al-Shaheen cargo to be delivered since it was introduced as a deliverable grade in the MoC process from Jan. 4.
Chinaoil and Totsa were offering partials of al-Shaheen and Murban, respectively, during the MoC, traders said.
Tight supply of medium grades, partly due to strong demand from Chinaoil, pushed up the premiums for March-loading Banoco Arab Medium to 50-60 cents a barrel from about 30 cents in previous deals.
BAPCO sold two cargoes via a tender, one to TonenGeneral and the other possibly to Chevron, traders said. The deals could not be verified.
BP offered March-loading Das at 50-60 cents a barrel above its OSP, traders said, following Murban offers from Totsa at a premium of 70 cents a barrel a day earlier. It was unclear if any cargoes were sold.
More cargoes could move in purchase tenders to be held by Indian Oil Corp and possibly Taiwan's CPC.
Tasweeq is expected to award its condensate tender later on Wednesday. Some traders expect premiums to have dropped from record levels on weaker naphtha cracks.
Last week, JX and TonenGeneral bought a deodorised field condensate (DFC) cargo each at premiums of about $6.80 a barrel to Dubai quotes, a trader said, but a subsequent sale saw DFC's premium slip closer to $6.
"Serious buyers are gone," a second trader said, referring to lower demand for remaining condensate supply.
DME OMAN
DME Oman futures for March settled at $23.81, down $1.01, at 0830 GMT. This put DME Oman at $0.83 a barrel below Dubai swaps, up from a discount of $1.02 in the previous session.
MARKET NEWS
There is more storage space for crude around the world than anticipated, which will help prevent further sharp falls in the price but also weigh against significant price rises, analysts and industry watchers say.
A storage project with 25 million barrels of space will open in Oman in 2019, helping to keep the country's oil flowing, Oman Tank Terminal Company (OTTCO) said on Tuesday.
Foreign oil tanker owners are expected to make a slow return to Iran despite the lifting of many sanctions as insurers tread carefully, leaving shipping players unwilling to pick up cargoes as quickly as Tehran has wanted.
Saudi Arabia's policy of keeping a vast amount of oil production capacity unused is a possible complication in any listing of the upstream part of state oil firm Aramco, industry sources said.
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