SINGAPORE: Spot differentials in the Middle East crude market continued to improve as refiners, keen to conclude buying for February cargoes before the Christmas holiday, were lured by lower official selling prices (OSP).
Qatar Marine flipped into a premium of around 30 cents a barrel to its OSP, a trader said. The medium heavy grade was last month mostly sold at discounts of 30-50 cents a barrel.
A South Korean refiner bought a cargo of Abu Dhabi's Murban grade at around 50 cents a barrel above its OSP, and the grade may have traded at a premium as high a 60 cents a barrel, traders said.
That was up from a premium of 30-40 cents a barrel late last week. The grade traded close to parity for January.
"I think refiners are comfortable making a move at these levels," a trader with a Western trading house said.
The inflow of Atlantic basin grades to Asia was limited by a wider spread between Brent and Dubai crude and by high freight rates, thus boosting demand for Middle Eastern grades.
Most refiners were in a rush to conclude buying February cargoes this week, as many traders will be away for the Christmas holiday.
However, despite improving refining margins, end-user demand remained depressed, traders said.
"Lower flat price may trigger some new demand, but that really depends on the economy. We just don't know yet," the trader said.
OSP
Iran set its official selling prices (OSP) for January-loading Iran Light crude to Asia at $1.80 cents a barrel discount to Oman/Dubai, down $1.93 from the month before, traders said on Monday.
REFINERY
Japanese oil refiner TonenGeneral Sekiyu KK said on Monday it had resumed normal operations of the sole 156,000 barrels per day (bpd) crude distillation unit (CDU) at its Sakai refinery in western Japan.
DME OMAN
DME Oman for February settled at $60.19 a barrel, down 35 cents, at 0830 GMT. This puts DME Oman at 69 cents a barrel below Dubai swaps, against a discount of 78 cents in the previous session.
MARKET NEWS
South Korea's imports of Iranian crude oil rose 6.5 percent in November from a year earlier, but shipments for the first 11 months of the year were still below the 2013 average, in line with international sanction requirements.
Crude oil supplies from Saudi Arabia inched up in November from a month earlier, an industry source said on Friday, signalling no change in the kingdom's supply, despite a global oil glut and a steep fall in prices.
Iranian exports of ultra-light oil have more than doubled this year from 2013 to about 190,000 barrels per day as buyers have taken advantage of a loophole in oil sanctions, International Energy Agency data showed on Friday.
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