SINGAPORE: The Middle East crude market held steady on Tuesday before the close of a monthly Qatari al-Shaheen tender which will kick off trade for March-loading cargoes this month.
Tasweeq offered three cargoes of the heavy sour crude for loading in March, one more than the previous month, in a tender to close on Wednesday, traders said.
The grade could trade again at a discount on ample supply, they said, although the narrowest fuel oil crack to Dubai in more than two years may provide some support.
Light grades are supported by a rebound in naphtha cracks and reductions in Abu Dhabi OSPs although Japan's crude demand in the second quarter will be curbed by maintenance.
JX Nippon's demand for March-loading crude could fall slightly as it is scheduled to shut CDUs of about 210,000 barrels per day (bpd) capacity in Mizushima and Osaka. Idemitsu could also trim crude imports from April onwards due to maintenance at a 220,000 bpd CDU in Chiba.
China imported record levels of crude in December at 7.15 million bpd, as the country took advantage of cheap global prices to boost shipments, despite faltering demand growth at home.
Global oil prices continued to slump on Tuesday, with Brent down more than 4 percent to the lowest in nearly six years.
"China could place as much as 5-10 million tonnes of crude into strategic reserves by the middle of this year," ANZ analysts said in a note.
Two storage projects in China's second phase of emergency stockpiles will likely be filled within the first quarter, the bank said, although capacity constraints could hinder stockpiling until more storage facilities are built in the second quarter.
OSPs
Iran set its official selling prices (OSP) for February-loading Iran Light crude to Asia at a $1.20 a barrel discount to Oman/Dubai, up 60 cents from the month before, traders said.
Yemen has set the official selling price of its Masila crude for loading in March at a premium of $2 a barrel to dated Brent, up $1.58 from the previous month, its government said.
UNIPEC UK bought the entire 1.3 million barrels of Masila crude offered by Yemen, the government said in a statement.
DME OMAN
DME Oman for March settled at $43.51 a barrel, down $2.14, at 0830 GMT. This puts DME Oman at $1.86 a barrel below Dubai swaps, up against a discount of $2.45 in the previous session, amid thin trade volumes.
A trader said the strength in Oman was likely temporary as supply is expected to remain ample with a local refinery shut for maintenance.
MARKET NEWS
Saudi Arabia will supply full contracted volumes of crude oil to at least two Asian term buyers in February, unchanged from January, industry sources familiar with the matter said.
OPEC won't change its oil production strategy and any sudden rebound of prices is unlikely, United Arab Emirates oil minister Suhail bin Mohammed al-Mazroui said.
A diplomatic push by Venezuela and Iran for an OPEC oil output cut has failed to soften the refusal of the group's Gulf members to do so for now, delegates said.
Oil production from the fastest-growing US shale plays is set to continue expanding by some 90,000 barrels per day (bpd) in February, a smaller increase month over month compared with January, projections from the US Energy Information Administration showed.
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