SINGAPORE: Middle East crude benchmarks Oman and Dubai edged lower on Tuesday amid ample supplies and lower demand during seasonal maintenance in the second quarter. Supplies to Asia are increasing as more arbitrage cargoes from the United States are available with the release of U.S. strategic petroleum reserves and rising output from Permian basin.
The Organization of the Petroleum Exporting Countries and their allies have also decided earlier this month to continue increasing output by 400,000 barrels per day in January.
Chinese refiner Rongsheng has bought 1 million barrels of Upper Zakum for February loading from oil major at about $1.80 a barrel above Dubai quotes last week, traders said. This week, it has a tender seeking term supplies for February or March to December delivery, they said.
The refiner may have bought 1 million barrels each of Oman and Upper Zakum crude via the term tender, traders said. Separately, spot values for light crude are also under pressure after ONGC sold a February-loading Russian Sokol cargo to Glencore last week at $4.70 a barrel above Dubai quotes, the lowest premium in three months. ICE Murban futures’ premium to Dubai crude slipped to $2.47 a barrel on Tuesday, the lowest since September.
Iraq has set January Basra Medium crude official selling price at $1.40 a barrel above the average of Oman and Dubai quotes, 50 cents higher than December. For regional grades, PetroBrunei has issued a tender to sell a Kimanis crude cargo loading on Feb. 1-5 which will close on Dec. 16. There are Kimanis cargoes for export on February.
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