SINGAPORE: The Middle East crude market held steady on Tuesday before trading for April-loading cargoes takes off later this week.
Cash Dubai strengthened after Chinaoil sold April 24 Dubai partials to Shell, Trafigura and Gunvor at about $55.15 a barrel in the window, one trader said.
That puts cash Dubai at about $2 a barrel below Dubai swaps, up from around $2.30 in the previous session.
Iran set the official selling price (OSP) of its Iranian light grade for Asian buyers at $2.10 a barrel below the Oman/Dubai average for March, down 90 cents from the previous month, an industry source with direct knowledge of the matter said on Tuesday.
Vitol Chief Executive Ian Taylor said on Tuesday that he expects a "dramatic" build in global oil stocks over the next few months, but that supply and demand in the oil market would move into balance in the second half of this year.
VLCC chartering activity is expected to pick up in the second quarter, when on-land storage capacity reaches its limit and traders will turn to floating storage, analysts at Societe Generale said in a note.
Still, with current costs of chartering a VLCC, the contango would need to widen further to make it profitable for traders to store crude on tankers, they said.
OPEC forecast demand for its oil would average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous prediction, the group said in its monthly report.
DME OMAN
DME Oman for April settled at $55.89 a barrel, up 5 cents, at 0830 GMT. This puts DME Oman at $1.27 a barrel below Dubai swaps against a discount of $1.26 in the previous session.
MARKET NEWS
Oil prices may come under more downward pressure before recovering later this year as ample supplies push inventories higher, perhaps towards record highs, the West's energy watchdog said on Tuesday.
New crude oil grades may have to be added to the North Sea Brent price benchmark earlier than previously thought, possibly from 2017, as lower oil prices cut investment in the region, an executive at pricing agency Platts said on Monday.
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