SINGAPORE: Dubai cash prices in the Middle East crude market ended March on a strong note on Tuesday after Shell resumed purchases.
Five cargoes - four Oman and one Dubai - will be delivered following a flurry of trades on the window, a trader said, which have strengthened the Dubai price and also narrowed the benchmark's intermonth contango spread.
But Abu Dhabi light crude weakened after BP offered Das crude on RIM's window at 30 cents a barrel above its OSP. This was down from an earlier offer of 35 cents, another trader said.
India has bought the first oil for its strategic petroleum reserve (SPR), trade sources said on Monday, marking the start of a round of purchases by the world's fourth-biggest oil consumer to build up emergency stockpiles.
The VLCC cargo Basrah IOC bought from Unipec, the trading arm of China's state-backed oil producer Sinopec, was purchased at a premium of 50-60 cents to the official selling price of the Iraqi grade, the sources said.
Separate from the SPR purchases, IOC has re-floated a tender seeking a million barrels of heavy grades for April first half loading, traders said. This tender will close on Tuesday with bids remaining valid till Wednesday.
Traders were also watching the outcome of the Iran nuclear talks. Iran and six world powers ramped up the pace of negotiations on Tuesday ahead of a deadline for a preliminary nuclear deal that was less than 24 hours away, as both sides warned it was crucial to overcome differences that could wreck an agreement.
DME OMAN
DME Oman for May settled at $52.84 a barrel, down $1.11, at 0830 GMT. This puts DME Oman at $1.09 a barrel below Dubai swaps, compared with a discount of 87 cents in the previous session.
The official selling price (OSP) for Oman crude in May will fall by $1.12 to $55.09 a barrel, Reuters calculations based on data from the Dubai Mercantile Exchange (DME) showed.
The Dubai crude OSP, set at a $0.70 per barrel discount to DME Oman, was calculated at $54.39 a barrel for May.
MARKET NEWS
China has managed to export a large shipment of crude oil from Yemen over the weekend, ship-tracking data showed on Monday, despite mounting chaos in the country after the launch of Saudi-led air strikes last week.
A Libyan state oil security force has called on state oil firm NOC to reopen the Ras Lanuf and Es Sider oil ports, the country's two biggest, after a rival force pulled out from the area following months of fighting, a spokesman said on Monday.
Oil output at Rosneft's Vankor deposit, a driver of Russia's recent oil production growth, may start declining next year, a top company official said, underlining the challenges of production in far-flung regions.
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