SINGAPORE: Sweet grades were slow to move in the Asia-Pacific crude market on Wednesday, depressed by the prospect of excess African supply heading to the east.
As much as 50 million barrels of African crude remained unsold for July-August loading, a trader said, as weak demand caused the overhang.
High freight costs for Suezmaxes have also deterred Asian buyers from snapping up the much-depressed African oil where premiums have slipped to multi-year lows.
But regional sweets will remain under pressure even if a fraction of the surplus African oil heads to Asia, the trader said.
Indonesia's Pertamina is looking to pick up some of the cheap African barrels. Its trading arm Petral will close on Thursday a tender to buy sweet crude for October arrival. Bids will remain valid until Friday.
Discounts for September-loading North West Shelf (NWS) condensate may have narrowed to levels between $2.50 and $3 a barrel, some traders said, from $3-$3.30 a barrel for cargoes loading in the previous month. Woodside may have sold a cargo although details remained sketchy.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, was at $2.82 a barrel for September, up 15 cents.
TENDERS
More details emerged for PV Oil's Chim Sao tender. The Vietnamese marketer sold three 350,000-barrel cargoes to BP, Vitol and Taiyo Oil at premiums between $3.80 and $5.20 a barrel to dated Brent. The cargoes will load on Sept. 4-8, 14-18 and 25-29.
MARKET NEWS
Japan will start treating as "quasi-strategic reserves" some of the crude stored by Saudi Arabia and the United Arab Emirates in the Asian nation, as a way to help meet Tokyo's strategic reserve obligations, a trade ministry panel said.
Libya's National Oil Company spokesman Mohamed El Harari said output as of Monday was around 450,000 bpd compared with 555,000 bpd on Thursday.
Syria's oil sector has lost around $23.5 billion due to damage to facilities and pipelines, looting and production delays since the start of the country's crisis in 2011 and output has fallen sharply, Syria's oil minister said.
Islamic State militants seized four small oilfields when they swept through north Iraq last month and are now selling crude oil and gasoline from them to finance their newly declared "caliphate".
Poland's PKN Orlen said on Wednesday it may temporarily close its ailing Lithuanian refinery, where 5 billion zlotys ($1.6 billion) in impairment charges pushed the company to a record loss in the second quarter.
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