SINGAPORE: The Asia-Pacific crude market held steady on Wednesday amid little activity, although an overhang of cargoes continued to weigh on differentials in the region.
Oil prices fell for a fifth straight session on Wednesday after weak Chinese economic data fuelled concerns over a growing supply glut in the region.
Uncertainty over the prospect of U.S. condensate exports to Asia grew, after BHP Billiton said it would ship lightly processed ultra-light U.S. oil abroad without explicit permission from the government.
Pioneer Natural Resource Co, one of only two companies to have exported U.S. condensate, said on Tuesday it had exported six cargoes of condensate from the Eagle Ford shale patch since July with "improved pricing" compared to domestic rates.
However, many refiners in Asia were skeptical about making commitments to buy U.S. condensate, saying sellers could not guarantee a steady supply and that prices weren't competitive compared with Qatari shipments.
"With no guarantee over consistent supply and price competitiveness, I don't think we will have a direct business with them," a source with a South Korean refiner said.
In Japan, authorities will assess whether U.S. condensate imports get duty-free status on a cargo-by-cargo basis.
Japanese refiners were initially concerned that U.S. condensate would be treated as an oil product subject to import duties, but importers now expect favorable treatment as the first U.S. cargo got through customs without being taxed as a crude.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, narrowed 2 cents to $1.67 a barrel.
TRADES
Oil Search sold a December-loading cargo at a discount of slightly more than $1 a barrel against Dated Brent, traders said. The grade was last sold at a discount of around $1 a barrel, they said.
The buyer was unknown and the deal could not be independently verified.
REFINERY
Taiwan's Formosa Petrochemical Corp plans to shut a crude distillation unit and several secondary units for a major maintenance at its 540,000-barrel-per-day (bpd) refinery in Mailiao next year, a company spokesman said on Wednesday.
State-owned Abu Dhabi National Oil Co (ADNOC) is expected to start production from its newly expanded Ruwais refinery in the second half of November, on track to meet initial targets, industry sources said.
MARKET NEWS
India's risk-averse state refiners are reluctant to follow central bank advice to hedge part of the country's $165 billion annual oil import bill, fearing administrative action if they suffer losses, refinery sources said.
Canada's Come by Chance refinery, on the far eastern tip of the country, has swapped out its mainstay Iraqi crude to run almost wholly on U.S. shale oil, industry sources say, the latest sign of how the shale boom is redrawing global oil trade.
Forget conspiracy theories and be prepared for OPEC to cut output in November because this is what they need to do and have done in the past, veteran oil traders who run and co-own some of the world's biggest trading firms told the Reuters Commodities Summit.
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