SINGAPORE: Inflows of arbitrage cargoes continued to weigh on the Asia-Pacific crude market on Wednesday, although demand emerged for regional condensates.
Vitol canceled a planned 2 million barrel shipment of Forties to South Korea, traders said, possibly due to a brief stoppage at the Buzzard field, the biggest contributor to the Forties crude stream.
Shipments to Asia from the Atlantic Basin have increased due to Brent's narrowing premium to Dubai swaps. Brent-Dubai Exchange of Futures for Swaps (EFS) narrowed 12 cents to $1.03 a barrel on Wednesday, near a four-year low reached earlier this month.
Differentials for Australia's Northwest Shelf condensate (NWS) held steady, with Shell selling a cargo for loading Oct. 21-25 to Samsung Total at around $2.90 a barrel below Dated Brent, traders said.
Chevron had earlier sold a cargo loading Oct. 12-16 at a premium of $2.80-$2.90 a barrel. All four NWS cargoes loading in October were now committed, with Woodside also selling its cargo, although details of the deal were not clear.
Malaysia's Petronas sold 300,000 barrels of Muda condensate to SK Energy at $1-$1.20 a barrel above Dated Brent, traders said. The grade was last sold for early-September loading at a premium of around 50 cents, according to Reuters data.
Premiums for Russia's Vityaz crude fell further, after Sakhalin Energy sold two cargoes of the light sweet grade for October-loading at around $1.30 a barrel and $1.80 a barrel.
The deals were done after the grade had fetched a premium of around $2.50 a barrel for a cargo loading mid-October.
A higher than usual API of around 48 for the two cargoes may have affected values of the grade, a trader said. The quality change was due to planned maintenance on the integrated oil and gas project.
South Korean refiners increased throughput in July by 10 percent from the previous month to 2.57 million barrels per day (bpd), the highest this year, data from state-run Korea National Oil Corp (KNOC) showed.
"While the strong monthly uptick is likely a result of the better margins over last month, it also came from a relatively low June figure given that maintenance in South Korea peaked in June, according to our estimates," analysts at JBC Energy said in a note.
"Looking ahead, however, we do expect to see throughput fall again this month in line with the deteriorating margin situation in the region," they said.
Industry sources earlier said South Korean refiners were planning to trim output this month as a result of slow demand in the region.
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