SINGAPORE: Lower seasonal demand is expected to weigh on Asia-Pacific crude differentials when trading for April-loading cargoes begins this week, though refiners continue to benefit from high margins, traders said on Tuesday.
Traders were awaiting the result of a few tenders for Vietnamese grades to gauge direction for April trading.
PV Oil, the marketing arm of PetroVietnam, closed a tender on Tuesday to sell 200,000 to 500,000 barrels of Su Tu Den due to load in April. The result of that tender and one to sell three cargoes of Chim Sao crude is expected by the end of the week.
Asian refiners have benefited from strengthening profit margins in recent weeks, supporting spot differentials for regional grades.
Complex refining margins in the Singapore hub have averaged about $8.30 a barrel over the past week, compared with around $7.50 in January and $6.10 in December.
Still, refiners said they remain cautious, questioning the sustainability of high margins amid high volatility and slowing economic growth in the region.
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.
Oil prices may come under more downward pressure before recovering later this year as ample supplies push inventories higher, perhaps towards record highs, the International Energy Agency said on Tuesday.
Brent-Dubai Exchange of Futures for Swaps (EFS)<DUB-EFS-1M>, or Brent's premium to Dubai swaps, narrowed 8 cents to $1.52 a barrel. The April spread stood at $1.42 a barrel.
MARKET NEWS
Indian diesel cargoes are being shipped to Australia in a rare move as rising competition from new Middle East refineries has made it more difficult to land the fuel in India's core traditional markets in Europe and Africa.
About 1.2 million tonnes of naphtha were put on provisional bookings for Asia arrival in March, mainly from Europe and the Mediterranean, traders said, making this the lowest volumes meant for the East since May 2014, Reuters data showed.
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