SINGAPORE: The Asia-Pacific crude market could come under renewed pressure as more arbitrage cargoes are headed to the region.
Differentials for some regional grades have been supported over the last month by high freight rates, making it less profitable to bring crude from other regions to Asia.
However, some Asian refiners have begun to pick up more West African cargoes after a large overhang pushed differentials to multi-year lows.
One or two VLCCs may also load North Sea crude this month for shipping to South Korea.
Brent crude fell below $50 a barrel for the first time since 2009. Complex refining margins in the Singapore hub averaged about $6.40 a barrel last week, slightly up from the December average of just above $6 a barrel.
Differentials for Bayu Undan condensate edged up after ConocoPhillips sold a February-loading cargo to ExxonMobil at around $4 a barrel below dated Brent, traders said.
January-loading Bayu Undan was sold at a discount of $4.20-$4.50 a barrel, according to Reuters data.
Petronas may have sold a February cargo of Labuan at less than $5 a barrel above dated Brent, a trader said, although the details were not clear.
Petronas failed to award a tender for the 600,000-barrel cargo, possibly due to low bids, instead seeking to sell it via direct negotiations, traders had said.
REFINERY
Taiwan's Formosa Petrochemical Corp will run its 540,000 barrels per day (bpd) refinery in Mailiao at an average of nearly 90 percent capacity this month, compared with 70 percent in December, its spokesman said on Wednesday.
MARKET NEWS
Oil market oversupply may last months or even years, but prices could recover if non-OPEC producers "act rationally", the United Arab Emirates (UAE) oil minister said in remarks published on Wednesday.
As a test of wills between OPEC nations and US shale drillers fuels a global oil market slump, a brewing battle between Canadian and Saudi Arabia heavy crudes for America's Gulf Coast refinery market threatens to drive prices even lower.
Comments
Comments are closed for this article.