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SINGAPORE: Asia-Pacific crude stayed under pressure on Thursday as sellers were still trying to offload unsold May-loading cargoes in the market hit by weak demand from China.
High oil inventories and a tanker logjam at Shandong's key port Qingdao have curbed independent Chinese refiners' demand for crude.
Grades from Malaysia, Australia, Vietnam and Russia were still available for loading in May even as most buyers are shifting their focus to cargoes to be lifted in June.
BHP has sold its second Pyrenees cargo loading in May to Vitol likely at a premium below $1 a barrel to dated Brent, a trader said. Quadrant Energy has a cargo loading at end-May which may still be available, he said.
A wide Brent-Dubai spread is also depressing spot differentials for grades pegged to the European benchmark. Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS) was at $3.37 a barrel for June, 1 cent lower from Wednesday.
Furthermore, a narrowing of the Brent contango structure is preventing traders from storing excess crude.
The price of Brent crude oil for nearby delivery is being supported by upcoming maintenance that will tighten supply of two North Sea crude grades underpinning the global benchmark, trade sources said on Wednesday.
REFINERY
Japan's Showa Shell Sekiyu KK said it planned to refine 1 percent less crude for the domestic market in April-June, compared with the same period a year ago, but was aiming for robust oil product exports to offset slowing demand at home.
China's independent oil refinery Shandong Kenli Petrochemical Group is planning a one-month regular overhaul at its 60,000 barrels-per-day plant in July, a company official told Reuters on Thursday.
Japan's Idemitsu Kosan Co Ltd said it would refine 5 percent less crude oil for the domestic market in April than a year earlier amid projections of lower oil sales at home.
MARKET NEWS
Oil production by members of the Organization of the Petroleum Exporting Countries will rise this year and next, Goldman Sachs said, as the producers' cartel is expected to fail to agree on a coordinated freeze or cut in output.
A surge in oil buying by China's newest crude importers has created delays of up to a month for vessels to offload cargoes at Qingdao port, imposing costly fees and complicating efforts to sell to the world's hottest new buyers.
Oil exports from Iraq's southern ports have risen to an average of 3.494 million barrels per day (bpd) in April, an official from the state-run South Oil Company said on Thursday.
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