SINGAPORE: Light grades stayed supported in the Middle East crude market on Monday as winter demand and slight reductions in official selling prices (OSPs) underpinned differentials for cargoes loading in February.
"OSPs were mostly cut and prompt demand is still good because of prompt margins," a trader with a North Asian refiner said.
Demand for Middle Eastern and Russian oil rose in Asia as arbitrage windows for crude produced in Africa, Europe and the Americas shut after freight rates doubled and as the Brent-Dubai spread stretched to its widest in four months.
Still, traders remained wary as Asia's crude demand may be curbed by the start of a maintenance season from March while supply remained abundant.
A rise in Sokol crude production has depressed its February premium to the lowest in at least three years.
ONGC sold a 700,000-barrel cargo to South Korean refiner SK Energy at $2.60 a barrel above Oman/Dubai quotes via a tender, traders said on Monday.
This is equivalent to about $3 a barrel above Dubai quotes, down by more than half from a year ago and the lowest premium since December 2011, when Reuters' record started.
Nine cargoes of Sokol were sold for loading in January 2015, up from a monthly average of about seven for most of 2014, traders said.
There could be up to 10 cargoes available every month later next year depending on production rates at the new fields, they added.
TENDERS
Qatar's Tasweeq issued its monthly tender to sell deodorised field condensate and low sulphur condensate for February loading. The tender will close on Dec. 16 with bids valid until a day later.
OSPS
Yemen has set the Masila crude OSP for February at a premium of $0.42 a barrel to dated Brent, down $0.04 from the previous month, its government said.
Unipec UK bought the entire 1.4 million barrels of Masila crude offered by Yemen, the government said in a statement.
DME OMAN
DME Oman for February settled at $66.00 a barrel, down $1.10, at 0830 GMT. This puts DME Oman at 51 cents a barrel below Dubai swaps, against a discount of 45 cents in the previous session.
MARKET NEWS
Oil prices are likely to remain around $65 a barrel for the next six to seven months, the head of Kuwait's state oil company said.
China imported 25.41 million tonnes of crude oil in November, up 5.5 percent from 24.09 million tonnes in the previous month, according to data from China's General Administration of Customs.
Rates for very large crude carriers (VLCCs) on key Asian routes are likely to hold steady at around W60-65 next week as owners resist charterers' attempts to push rates down, brokers said. Around 20 Middle East-Asia cargoes have yet to be fixed for the last 11 days of December.
Algerian state energy company Sonatrach said on Sunday it will intensify its exploration efforts by drilling 125 wells a year and expanding its transportation network to help boost production over five years.
The supply of North Sea crude that underpins the Brent benchmark will average 890,000 barrels per day (bpd) in January, according to loading schedules and trade sources, less than in December.
Comments
Comments are closed for this article.