SINGAPORE: January spot differential for Upper Zakum in the Middle East crude market hit the widest discount in two months on Monday due to lacklustre demand for the grade on the Platts window.
Vitol sold a cargo to Trafigura on the window at 80 cents a barrel below its official selling price (OSP), traders said.
Last month, the Abu Dhabi crude's premium hit the highest in 11 months, boosted by strong demand from Chinaoil.
In contrast, firm Chinese demand for Oman has buoyed the grade's value.
A Chinese end user has bought over-the-counter Oman at discounts between 40-50 cents a barrel to Dubai quotes, a trader said, partly causing discounts to narrow late last week.
A Thai refiner may have bought a Murban cargo on Dubai basis, equivalent to a single-digit premium to its OSP, he said.
Ample supply continued to weigh on the Middle East crude outlook despite improvement in Asian refining margins.
Iraq's oil exports from its southern terminals held close to a record high of about 2.5 million barrels per day in October even as Qatar has cut output due to low demand and a refinery maintenance.
Iran's oil minister accused some countries on Sunday of making up excuses to justify their refusal to stabilise prices by cutting output, a possible reference to Saudi Arabia as a Saudi official insisted the issue should be left to market forces.
Iran and fellow OPEC producer Nigeria will start drawing on reserves to cope with a near 30 percent drop in global oil prices since June.
The ample supply may have boosted Asian refiners' bargaining power in talks for next year's supply.
India's state-refiners, which account for about two-thirds of the country's oil processing capacity, are seeking more flexibility in import contracts as they look to tap new sources of supply flushed out by the US shale boom.
TENDERS
ONGC sold a Sokol cargo to Gunvor at a premium of just below $3 a barrel to Oman/Dubai quotes for Jan. 13-16 loading, traders said, down from a premium of about $3.20 in a previous deal.
DME OMAN
DME Oman for January settled at $76.34, up 83 cents, at 0830 GMT. This puts DME Oman at 6 cents a barrel below Dubai swaps, compared with a discount of 7 cents in the previous session.
MARKET NEWS
Saudi Arabia, the United Arab Emirates and Bahrain agreed on Sunday to return their ambassadors to Qatar, signalling an end to an eight-month rift over Doha's support for Islamist groups.
South Korea's imports of Iranian crude in the first 10 months of 2014 were below the 2013 average, meeting international sanction requirements, and it imported nearly 120,000 tonnes from the United States as it brought the first Alaskan crude in a decade.
Libya's El Sharara oilfield, which normally produces around 200,000 barrels per day, remains shut due to its main pipeline being closed, an official from the state-run National Oil Corp said on Monday.
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