SINGAPORE: Spot premiums in the Middle East crude market rose, with Abu Dhabi's flagship Murban hitting a 19-month high, on tighter supplies and robust demand, trade sources said.
While the end of seasonal refinery maintenance in Asia and firm margins buoyed demand for June-loading cargoes, supplies from the Middle East have tightened from March after Saudi Arabia and Abu Dhabi trimmed the volume of crude loaded for buyers in the east.
It's a combination of "tighter supply from Middle East, recovery from turnaround at Japanese refineries and still robust refining margins," a trader with a North Asian refiner said.
Japanese refiner Fuji Oil has bought a cargo of June-loading Murban crude from Total at 90 cents a barrel above Murban's official selling price (OSP) via a tender, the trade sources said, but the deal could not be independently verified.
The premium is the highest since trades conducted in September 2013, according to Reuters data.
Fuji Oil also bought a Qatar Land cargo from an unknown seller at a premium of more than 40 cents a barrel to its OSP, a trader said.
Another Abu Dhabi light grade Das has traded at up to 60 cents a barrel above its OSP, traders said.
Quality issues with Mexican oil may also increase demand for Middle East crude.
Pemex says it is in talks with buyers in Japan and South Korea over the chloride content of its Isthmus crude and would offer discounts if the level of the chemical that can cause corrosion was higher than usual.
Upper Zakum has been traded at a premium of about 50 cents, the highest since trades in October last year, according to Reuters data. June premiums for comparative grade Qatar Marine have also risen to about 50 cents, traders said.
Heavy sour al-Shaheen's spot supply improved from last month as Tasweeq offered five cargoes of al-Shaheen crude for June loading in a tender to close on Wednesday. Maersk will be marketing three cargoes on Tuesday.
At least two cargoes of Qatari condensate have been sold prior to Tasweeq's tender at levels steady from the previous month, trader said. The premium for deodorised field condensate (DFC) is about $2 a barrel to Dubai quotes while that for low-sulphur condensate (LSC) is $1.40-$1.50 a barrel, he said.
TENDER
Bahrain's BAPCO has sold two cargoes of Banoco Arab Medium for June loading to TonenGeneral and PTT at 10-15 cents a barrel above its OSP, steady from the previous month.
Russia's Surgutneftegas will close a tender on Tuesday to sell May 31-June 5 ESPO.
DME OMAN
DME Oman for June settled at $57.58 a barrel, down 29 cents, at 0830 GMT. This puts DME Oman at 40 cents above Dubai swaps against a discount of 64 cents in the previous session.
Chinaoil took delivery of an Oman cargo from Unipec on Tuesday.
MARKET NEWS
Oil production from the fastest-growing US shale plays is set to fall some 45,000 barrels per day to 4.98 million bpd in May from April, the first monthly decline in over four years, projections from the US Energy Information Administration showed.
Singapore's refining margins are down about a third since March as slowing demand, higher inventories and firmer oil prices pull the profit for turning crude into fuel off multi-year highs.
Australia's oil product imports in 2015 are expected to grow at their fastest pace in at least seven years as it shuts another ageing refinery, putting it on track to become Asia-Pacific's second biggest gasoline importer by the end of the decade.
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