SINGAPORE: The Middle East crude market firmed on Monday on robust demand in Asia and as sellers diverted excess supply held over from previous months into the Mediterranean region.
About 2 million barrels of Murban may head to the Mediterranean, a trader said, reducing length in the Asia market.
This helped prop up premiums for July-loading Murban to 30-40 cents a barrel, up from discounts in the previous month. Das Blend has also traded at similar premiums.
Bahrain and Qatar also sold some cargoes at higher premiums than previously.
Bahrain's BAPCO sold a July-loading cargo of Banoco Arab Medium to a North Asian refiner at a premium between 55 and 60 cents a barrel to its OSP, up from a deal last week at a premium of 40 cents a barrel, traders said.
Qatar's Tasweeq sold four cargoes of July-loading al-Shaheen via a tender at premiums between 95 cents and $1.45 a barrel, or $1.16 on average, to Dubai quotes, they said. Chevron, ExxonMobil and TonenGeneral bought the cargoes although these could not be independently verified.
Taiwanese refiner Formosa Petrochemical has bought its first cargo of Latin American crude and joined a growing group of Asian refiners that buy crude from South America, Canada and Europe, which could reduce their demand for Middle Eastern supply.
Formosa bought 1 million barrels of Ecuadorian Oriente crude in a tender from a trading company for delivery between July 20 and Aug. 20 at $2.50-$3 a barrel below Dubai quotes on an ex-ship basis, trade sources said.
Formosa also bought 1 million barrels of July-loading Oman crude via another tender at $1.50-$1.60 a barrel above Dubai quotes. The Taiwanese refiner did not award a tender to buy Basra Light crude.
Brent rallied last week on tighter supply, driven by potential strikes in Norway and the shutdown of BP's Foinaven field, Morgan Stanley analysts led by Adam Longson said in a note.
"Uncertainty over returning Libyan barrels, rising Benghazi conflict and further fighting in South Sudan continue to put barrels at risk globally," the bank said.
"The pressure on refining margins represents a bearish risk, especially for crude runs."
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