SINGAPORE: Oman crude loading in April hit its strongest differential in six months on Wednesday, buoyed by robust demand from China.
DME Oman futures for April settled at $29.00 on Wednesday's Asia market close, or 8 cents a barrel below Dubai swaps, narrower than a 31-cent discount in the previous session.
Chinese buyers may have turned to Oman after a drop in outright prices from Tuesday and as most other Middle East grades have been sold, a trader said.
Spot premiums continued to rise with Upper Zakum and Qatar Marine traded at 60-65 cents a barrel, up from 45-55 cents previously, traders said. ExxonMobil has not offered any spot Upper Zakum cargoes this month, they said.
Low outright prices stoked demand in Asia and as maintenance at oilfields in the United Arab Emirates and Qatar tightened supplies.
More refining capacity is also expected to stay online in the second quarter from the same period a year ago, supporting crude demand.
Iraqi crude remained popular as March Basra Light and Heavy grades traded at premiums of 80-90 cents, a trader said, despite a rise in monthly prices.
Decade-low outright prices are taking a toll on producers. China's state-owned Sinopec will shut four oilfields this year at Shengli in the eastern province of Shandong, and Azerbaijan's oil exports have fallen 5 percent year-on-year in January.
MARKET NEWS
The fate of the first global oil deal in 15 years could be decided on Wednesday when OPEC members travel to Iran to persuade the country to participate in a deal to freeze output levels, possibly by offering Tehran special terms.
Iran signalled on Wednesday it would take a tough line in talks among oil producers on restraining production, saying it would continue increasing its output until it reached levels seen before international sanctions were imposed.
A saturated oil storage network in the Caribbean is forcing some South American and African producers to keep selling crude at prices that do not cover production costs, brokers and sources told Reuters.
Oil firms have put major projects in West Africa on hold because of low prices - as they have across the globe - but when the market finally picks up, development is likely to recover much more slowly in the region than elsewhere.
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