SINGAPORE: The Middle East crude market continued to weaken on Monday, with Abu Dhabi grades falling deeper into discount after refiners have mostly completed their purchases for June.
Total offered Lower Zakum at around 70 cents a barrel below OSP (official selling price) on the Platts window, down from a 50 cent discount on Friday, traders said.
Murban may have traded at 30 cents a barrel below OSP, down from a single-digit discount last week, a trader said.
"I think the Japanese have mostly concluded their June purchases," a Singapore-based trader said.
Banoco Arab Medium slipped back into discount, trading at around 15 cents per barrel below its OSP, traders said.
Formosa may have bought a cargo of Basra Light from Unipec after already having secured one cargo of the Iraqi grade in a tender earlier this month, a trader said.
The price was not known, and the deal could not be confirmed.
Despite the softening market, sellers expect demand for crude to improve as refineries usually ramp up output in July to meet summer oil consumption.
"Refineries will be coming back from turnaround in end-June, ready for July delivery, so we should see better demand for Middle East grades loading towards end of June," another trader said.
Limited supply from Iraq may provide some support.
Exports from the OPEC member averaged 2.5 million barrels per day (bpd) of oil so far in April. That was more than in March but still well short of its 2014 target, due in part to repeated sabotage of a northern pipeline.
DME OMAN
DME Oman for June settled at $107.18, up 2 cents, at 0830 GMT.
This put DME Oman at $1.54 a barrel above Dubai swaps, up from a premium of $1.50 in the previous session.
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