SINGAPORE: The Middle East crude market came under pressure on Thursday as Iraq stepped up exports, adding to a glut of medium, heavy sour oil available to Asia.
This was despite a rise in spot crude purchases from Taiwan's CPC Corp.
Iraq's State Oil Marketing Organization (SOMO) has scheduled to export about 2.64 million barrels per day (bpd) of Basra Light in January, traders said, up from 2.55 million bpd in the previous month.
More oil could come from Iraq's Kurdistan Regional Government (KRG) which expects exports to total 800,000 bpd next year.
"KRG production could well reach 400,000 bpd by the end of next year and with 300,000 bpd from Kirkuk field, we're not far off 800,000 bpd, but that would be end-year, in my opinion," Samuel Ciszuk, senior adviser of security of supply to the Swedish Energy Agency, said on the Global Oil Forum.
Cash Dubai's discount to Dubai swaps widened to about $1.90 a barrel as Chinaoil continued to offer cargoes. The trading arm of PetroChina will deliver two cargoes of Upper Zakum to Shell on Thursday, bringing its total delivery of the Emirati crude to four this month, a trader said.
TENDERS
Taiwan's state-owned refiner CPC Corp has bought a large volume of Middle East crude via a tender for a second straight month for its refineries and to replenish its stockpiles, a source with direct knowledge of the matter said.
CPC bought 3.5 million barrels of crude for February loading, the source said, up from 2.73 million barrels in the previous month.
The purchase included three Murban cargoes at 40-50 cents a barrel above the grade's official selling price and four Oman parcels, trade sources said.
The Oman cargoes were priced at 60-70 cents a barrel below Dubai quotes on a free-on-board basis, they said. All the cargoes are of 500,000 barrels each.
Rosneft offered three ESPO cargoes for loading on Jan. 31-Feb. 5, Feb. 2-7 and Feb. 6-11 in a tender to close on Dec. 19 with bids valid until Dec. 25.
DME OMAN
DME Oman for February settled at $58.53 a barrel, up $1.52, at 0830 GMT. This puts DME Oman at 68 cents a barrel below Dubai swaps, against a discount of 40 cents in the previous session.
OSP
Dubai has set its official differential to Oman futures for March at a discount of $1.00 per barrel, the Dubai Department of Petroleum Affairs said on Thursday.
MARKET NEWS
Top oil exporter Saudi Arabia shipped more crude oil in October than a month earlier while volumes used by domestic refineries remained high allowing more oil products exports, official data showed.
Sinopec has completed about 8.2 million barrels of commercial crude reserve tanks in Tianjin, according to a report on the Chinese oil major's website on Thursday.
OPEC members which backed an output cut at the group's meeting last month are coming around to the view of Saudi Arabia that they need to focus on market share, further reducing the chance of any action to defend prices.
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