SINGAPORE: The Asia-Pacific crude market was supported on Tuesday as Brent's premium to Dubai crude dropped to its lowest in more than four years.
Brent-Dubai Exchange of Futures for Swaps (EFS) for September was valued at $1.07 a barrel, down 48 cents from Monday's close and the narrowest since July 8, 2010.
The spread has narrowed from nearly $5 a barrel two months earlier, as a glut of crude in the Atlantic Basin weighed on the European benchmark.
A narrowing gap makes Asia-Pacific Brent-linked grades more competitive compared with Middle East crudes. However, it also pushes more cargoes from places such as West Africa into the Asian market, potentially dampening appetite for regional grades.
* TENDERS
Petronas sold 350,000 barrels of Yetagun condensate loading Oct. 8 to ExxonMobil at around $1.50 a barrel below Dated Brent, traders said.
The premium was in line with the one fetched for the last Yetagun cargo, which loaded in July, they said.
More details appeared on the winners of PV Oil's tender to sell Rang Dong crude. Japanese trading house Itochu, along with an oil major, won the tender to buy the crude on a term basis from October until March 2015 at around $3 a barrel above Dated Brent.
Russia's Rosneft offered 700,000 barrels of Sokol crude loading Oct. 19-28 in a tender that closes Aug. 13.
Global oil markets remain well supplied thanks to big rises in oil production from North America, the International Energy Agency (IEA) said on Tuesday, suggesting oil prices are unlikely to rise much soon despite armed conflicts near key oil-producing areas.
"Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin," IEA said in its monthly report.
REFINERY
Chinese state energy giant Sinopec is temporarily cutting production at one of its refineries to reduce emissions in anticipation of the Youth Olympic Games this month in the eastern city of Nanjing, the company said on Tuesday.
Sinopec will also shut down its Jiujiang refinery in central China for around a one-month overhaul in October, an industry source said on Tuesday.
MARKET NEWS
Two of China's largest shipping firms are setting up a $1.1 billion crude oil tanker joint venture with a view to build up the country's fleet, as the world's second-largest oil consumer seeks better control over its oil imports.
US oil production from the country's fastest-growing shale plays is set to rise by some 89,000 barrels per day in September from a month earlier, Energy Information Administration data showed on Monday.
State-run Brazilian oil company Petrobras on Monday reaffirmed its forecast for a 7.5 percent increase in Brazilian oil output in 2014, challenging growing concern the company will extend a decade of failure in meeting production targets.
Royal Dutch Shell will cut around 250 jobs at its onshore North Sea oil operations in Aberdeen, Scotland as part of a business restructuring, a spokesman said on Tuesday.
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