SINGAPORE: Middle East crude benchmarks fell below $50 per barrel on Wednesday, the lowest in about five weeks as supply glut continues to persist despite the OPEC-led output cuts that are in place.
Iraqi fuel oil exports have soared since January despite a reduction in the country's crude production in line with OPEC supply cuts, industry sources said, in what could be a way to boost output of refined products and maintain oil revenues.
A manager at an Iraqi-headquartered energy trading company said: "The Iraqis have been working on optimising fuel oil exports ... in a move to compensate for the OPEC (crude) cuts."
WINDOW: Nine Dubai partials traded on Wednesday, traders said. The last partial traded at $49.75 per barrel, putting cash Dubai 42 cents below swaps, 4 cents above Tuesday's price spread. Mercuria bought five Dubai partials, while Chinaoil bought two partials. BP and Total bought one partial each.
INDIAN TENDERS: Indian state refiner IOC bought a cargo of Upper Zakum crude from Total in a tender that closed last week. IOC is likely to have bought around 8 million barrels of crude for loading in end-May and June, slightly more than usual, traders said.
The increase in Indian sour crude purchases could be due to the country's decision to cut back on Iranian crude purchases as it opts to reduce Iranian crude imports to gain leverage in a dispute it has over a gas field, a trading source said.
Indian refiner MRPL also bought a cargo of Banoco Arab Medium from Shell for June loading in a separate tender that also closed last week.
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