SINGAPORE: Robust refinery demand for lighter grades supported the Middle East crude market, while DME Oman continued to recover, traders said on Thursday.
India's Reliance will deliver one Upper Zakum cargo to Shell after selling two January Dubai partials to the oil major at around $39.70 a barrel, a trader said. The refiner also sold one January Dubai partial to Trafigura.
Demand for condensate was supported by strong naphtha cracks. Qatar's Tasweeq may have sold at least one cargo of deodorised field condensate (DFC) for January loading in its tender at more than $4 a barrel above Dubai quotes, traders said.
That would be up from premiums of around $2.50 a barrel for cargoes traded ahead of the tender, they said.
Sellers of Abu Dhabi flagship grade Murban were asking around 55 cents per barrel or more above its official selling price (OSP) amid short supply, but no deals were heard, traders said.
Shipments of North Sea crude could curb some demand for light sour Middle East grades, although only one VLCC appeared to be making the trip from Hound Point, where Forties loads, to Asia in November.
That would be down from the potential three that traders had initially believed were scheduled to do so, even though two new fixtures by SK Energy and CNR had appeared on shipping lists.
Medium grades such as Upper Zakum, Qatar Marine and al-Shaheen all remained in discount, traders said.
Iraq may increase oil output further in 2016, although less dramatically than this year, intensifying a battle for market share between OPEC members and non-OPEC rivals that has forced Baghdad to sell some crude grades for as little as $30 a barrel.
DME OMAN
DME Oman for January settled at $40.38, up 44 cents, at 0830 GMT. This puts DME Oman at $1.49 a barrel below Dubai swaps, up from a discount of $1.62 in the previous session.
MARKET NEWS
Oil traders are preparing for another downward turn in prices by March 2016, market data suggests, as what is expected to be an unusually warm winter dents demand just as Iran's resurgent crude exports hit global markets after sanctions are ended.
Iraq's semi-autonomous region of Kurdistan has begun targeting Baltic crude markets in north-western Europe, rivalling traditional Russian supplies and increasing an oil glut in the region, trading sources said and shipping data showed.
Commodity prices could see another sharp drop as an adjustment in supplies from energy, metals and agricultural producers remains insufficient in the face of weaker demand at key consumers like China, US investment bank Goldman Sachs said.
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