SINGAPORE: Premiums for January-loading Australian North West Shelf (NWS) condensate edged higher on Tuesday, underpinned by Indonesian demand and firm naphtha and gasoline refining margins.
BHP Billiton sold its Jan. 4-8 650,000-barrel NWS condensate cargo at a premium in the low-$1.00 per barrel to dated Brent, although details on the buyer remain unclear.
The January deal level is steady to slightly higher than the most recent deal for December-loading supplies when South Korean petrochemical producer Hanwha Total bought a Dec. 22-26 cargo from BP at around $1 premium to dated Brent, two traders said.
NWS condensate premiums have been rising, supported by firm light distillate refining margins and keen demand from Indonesia's Tuban-based TPPI condensate splitter. The Indonesian splitter takes about two cargoes, or half of the monthly NWS condensate supplies, each month.
December-loading NWS condensate cargoes began trading at around 50 cents above dated Brent last month. Subsequent deals for December-loading cargoes were done at higher premiums of about 90 cents to dated Brent, before rising to around $1.
Middle East condensate premiums for January-loading cargoes also edged higher after a Japanese trader sold a spot cargo of Qatari Deodorized Field Condensate (DFC) at around a $4 premium to Dubai quotes.
The DFC spot deal was done ahead of Tasweeq's monthly condensate sell tender and before news broke about the Qatari Ras Laffan 2 condensate splitter shutdown. Tasweeq awarded its sell tender for Low Sulphur Field Condensate (LSC) at around $3 above Dubai quotes in the tender.
Tasweeq, which offered prompt December-loading DFC cargoes, has since sold 2 million barrels of the grade at around $1 premium to Dubai quotes via private negotiations because of oversupply caused by the splitter shutdown, trading sources said.
On the Malaysian crude market, Malaysian state-owned Petronas awarded its January-loading Kikeh sell tender to Vitol at around $4.10-4.20 per barrel above dated Brent, trading sources said.
January premiums for regional crude remain supported, likely due to strong middle distillate refining margins seen during the winter season when demand for heating oil rises.
Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), was at $2.03 per barrel, up 5 cents for January.
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