SINGAPORE: DME Oman received a boost in the Middle East crude market on Tuesday as its discount to Dubai swap narrowed as much as 60 cents from the previous day ahead of a purchase tender.
Taiwanese refiner CPC Corp will close on Tuesday a monthly tender to buy sour crude for March loading. Grades that could be offered included Banoco Arab Medium, Masila, Oman, Ratawi, Qatar Marine, Murban, Das, Upper Zakum and al-Shaheen.
The refiner may buy Oman, a trader said.
The Middle East crude complex improved across the board on the back of better refining margins although some traders remained sceptical whether the recovery would last as Asia is headed into seasonal refinery maintenance.
Complex refining margins in Singapore averaged $6.74 a barrel in the last 15 days, up from $6.14 in December.
Discounts for March-loading Qatar Marine narrowed to 40-50 cents a barrel to its OSP after Occidental and Cosmo Oil sold their cargoes to SK Energy and Chevron, respectively, at these levels. Unipec sold a cargo to Shell at a slightly narrower discount of 30-40 cents.
The differential for March Upper Zakum has also improved after ExxonMobil sold a cargo at around parity to its OSP, up from discounts in earlier deals.
Sellers have also turned bullish, raising offers for remaining Murban cargoes, the first trader said.
TENDERS
Buyer details emerged for Surgutneftegas' ESPO tender. The Russian producer sold a cargo loading on Feb. 28-March 5 to JX Nippon and a March 6-11 cargo to GS Caltex at $1.80-$2.20 a barrel above Dubai quotes.
Premiums for another Russian grade Sokol have likely risen to $4.50-$5.00 a barrel in Rosneft's tender, traders said, up from $2.30-$2.50 in the previous month. The identities of the buyers remained sketchy.
DME OMAN
DME Oman for March settled at $45.22 a barrel at 0830 GMT, down 66 cents. This puts DME Oman at $1.61 a barrel below Dubai swaps against a discount of $1.85 in the previous session. DME Oman's discount narrowed further to $1.25 after settlement, a trader said.
MARKET NEWS
China's implied oil demand grew 3 percent in 2014 as China added refinery capacity and motor fuel use rose, with crude throughput and imports picking up steam in the fourth quarter and ending at records in December.
A crude oil pipeline and a deep sea port meant to secure an alternative route for Chinese imports overland through Myanmar are set to open at the end of January, but an affiliated refinery in China is months away from completion, sources said.
Iran sees no sign of a shift within OPEC towards action to support oil prices, its oil minister said, adding its oil industry could ride out a further price slump to $25 a barrel.
Libyan armed factions accused each other on Monday of launching new attacks near the country's largest oil port, Es Sider.
Russia's Rosneft has started oil production at the Arkutun-Dagi field, which is expected to produce 4.5 million tonnes of oil a year (90,000 barrels per day) at peak production, the company said.
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