SINGAPORE: Dubai slipped into wider discount on Tuesday in the Middle East crude market as Chinaoil scaled back purchases.
The trading arm of PetroChina bought just three Dubai partials from Gunvor, Shell and Unipec at $83.10 a barrel, equivalent to about 86 cents below Dubai swaps.
The discount is the widest since the start of Chinaoil's buying spree this month which has led to the delivery of 36 cargoes or 18 million barrels of Upper Zakum, Oman and Dubai.
The weaker Dubai is likely to buoy refining margins although it might not entice Asian refiners to buy more spot crude as they try to keep inventories low at the end of the year for accounting purposes.
A glut in fuel supply has also capped run rates at North Asian refineries despite the approach of a peak demand season in winter.
One North Asian refiner said it expects to lower run rates in the fourth quarter due to refinery maintenance.
A big cut in official selling price (OSP) for Abu Dhabi Murban has flipped its December differential into premium at about 15 cents a barrel, traders said, up from discounts of 40-50 cents in the previous month mainly due to a sharp reduction in its OSP.
A slump in naphtha cracks and improved supply from Qatar have depressed condensate values. Tasweeq sold 2-3 cargoes of December-loading deodorised field condensate (DFC) at $1.50-$1.90 a barrel above Dubai quotes, traders said, down from premiums of about $3 in the previous month. Reliance may have bought a cargo, they said.
Two cargoes of low-sulphur condensate (LSC) were sold at premiums from 50 cents to 80 cents a barrel, $1 lower than the previous month, traders said.
*TENDERS
Surgut closed on Monday an ESPO tender for a cargo loading on Dec. 4-9. The result was not immediately available.
DME OMAN
DME Oman for December settled at $84.01, down 17 cents, at 0830 GMT. This puts DME Oman at 5 cents a barrel above Dubai swaps against a discount of 6 cents in the previous session.
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