SINGAPORE: Spot premium for Russian ESPO Blend rebounded in the Asia-Pacific crude market on Thursday amid robust demand from refiners.
Rosneft sold two ESPO cargoes loading May 25-28 and May 29-June 1 to trading firms at $2.25-$2.50 a barrel above Dubai quotes, with the cross-month cargo fetching the higher premium, traders said.
The price level was at the higher end of the range of previous May-loading cargoes. The deals could not be independently verified.
Crude differentials continue to draw support from strong refining margins as refiners benefit from lower oil prices. Complex refining margins in the Singapore hub have averaged more than $9 a barrel in the last three weeks.
However, Singapore refining margins are forecast by Wood Mackenzie to fall in the second half of the year to $4-$6 a barrel due to high product inventories, putting pressure on refiners to cut runs.
"While refiners may see crude price discounts for a prolonged period, the benefits from the product markets may be short-lived," Wood Mackenzie analyst Suresh Sivanandam said.
"The positive impact of lower oil prices on global economic growth is beginning to be seen, but oil markets remain oversupplied with a 2-million-barrels-per-day surplus in the second quarter, which will continue to negatively impact physical markets," PIRA Energy said in a note.
Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent's premium to Dubai swaps, widened 12 cents to $1.37 a barrel.
MARKET NEWS
Russian oil output stood at 10.71 million barrels per day (bpd) in March, up from 10.65 million bpd in February, Energy Ministry data showed on Thursday.
After a precipitous drop since October, the U.S. oil rig count is nearing a pivotal level that experts say could begin to dent production, bolster prices and even coax oil companies back to the well pad in the coming months.
South Korean drivers are ignoring a 25 percent fall in petrol prices and still flocking to buy fuel efficient hybrid and diesel-powered cars, with many unhappy that retail prices haven't fallen further.
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