SINGAPORE: Trade for May-loading Middle East crude commenced, with Upper Zakum selling at a premium as refiners picked up competitively priced grades early in the trading cycle, traders said on Wednesday.
Mitsui sold a cargo of Upper Zakum to JX Nippon at about 30 cents a barrel above its official selling price (OSP), they said.
The Abu Dhabi grade was seen as more competitive than Oman and ESPO, even though its OSP rose, a trader said.
Traders expect OSP hikes for Murban and Das and a resumption of supply of ADNOC's flagship grade to compress their spot May differentials from a month ago, although they were split on whether the grade will slip into discount.
"Murban's OSP is too expensive. There are still many other grades in the market that we can choose," a buyer said, adding that the grade should be sold at parity or discount.
Another trader said he expects the grade to trade at premiums of 20-30 cents a barrel.
The world's biggest oil exporters both in and outside the Organization of the Petroleum Exporting Countries plan to meet in Moscow on March 20 to discuss an output freeze, an Iraqi oil official told state newspaper Al-Sabah.
Still, analysts at BNP Paribas remain sceptical that Saudi Arabia will change its current strategy in maintaining output and fight for market share.
"The long game is to ensure that a sustainable higher price emerges as a result of investment reductions," they said.
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