SINGAPORE: Cash Dubai stayed firm in the Middle East crude market on Monday, supported by Chinaoil's purchases.
The benchmark's discount to Dubai swaps narrowed to about 80 cents after the state Chinese firm bought nearly 30 partials on the window and took delivery of an Oman cargo from Unipec.
Shell sold two Oman partials to Chinaoil which depressed cash Oman to near parity to Dubai swaps.
On the supply front, Saudi Arabia has reduced contractual crude supplies to some customers in Japan and South Korea since March by trimming the volumes of oil loaded, six industry sources familiar with the matter said.
The move, which is limited to some buyers in North Asia, came even as output by the world's top crude exporter hit a record in March after it pledged late last year to keep production unchanged to defend its market share.
Saudi exports to China increased to 33 percent of the OPEC total in March from 24 percent when they announced production intentions in November, according to data from Thomson Reuters Oil Research and Forecasts.
Iraq has set the first monthly price for its new Basra Heavy crude for May, but has likely delayed the launch of the grade until the following month, according to industry sources.
The country's State Oil Marketing Organisation (SOMO) did not allocate any supply of Basra Heavy crude in May, indicating a delay, four industry sources familiar with the matter said.
Basra Heavy, which could account for 13 percent of Iraq's southern oil exports, will be sold to Asia at $6.85 a barrel below Oman/Dubai quotes in May, SOMO said.
"The discount is bigger than I'd expected," said a trader with a North Asian refiner, adding that the grade was more attractively priced to Asia than to Europe or the United States. If the API of the crude falls below 26 degrees, additional discounts at 60 cents per barrel per drop in API would be applied, traders said.
DME OMAN
DME Oman for June settled at $57.87 a barrel, up $2.67, at 0830 GMT. This puts DME Oman at 64 cents above Dubai swaps against a discount of 73 cents in the previous session.
MARKET NEWS
World oil markets will not see a significant rise in Iranian supplies for up to five years even if the OPEC member and world powers clinch a final nuclear deal by end-June, Fatih Birol chief economist and future head of International Energy Agency (IEA) said.
Big money investors are calling a bottom in oil prices, US government data showed on Friday, with hedge fund heavyweight Andy Hall predicting "much stronger prices" from the second half onwards.
Oil majors may have slashed capital spending but national oil companies (NOCs) in the Middle East and North Africa show no sign of cutting investment, buoying oilfield services that the stock market has beaten down.
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