SINGAPORE: Middle East crude benchmarks kicked off trade this month at stronger levels as traders may be betting on tighter sour crude supplies after Washington imposed sanctions on Venezuelan oil exports.
DME Oman crude futures at market rose above the one-minute ICE Brent marker, in an unusual move not seen since September. Oman's premium to Dubai quotes was close to $1 a barrel, the highest premium since Jan. 21, Reuters data showed.
A stronger sour crude benchmark also led Brent's premium to Dubai quotes to drop further to 60 cents a barrel, the narrowest spread between the two price markers since June 2017, according to data on Refinitiv Eikon.
The narrow Brent-Dubai price spread is expected to draw more arbitrage supplies from the Atlantic Basin to Asia.
SAUDI OSP PREVIEW: Saudi Arabia is expected to keep prices for most of the crude grades it sells to Asia little changed in March, with most attention on heavier grades following sanctions on Venezuela, traders said.
The top oil exporter may keep the official selling price (OSP) for flagship Arab Light crude in March unchanged from the previous month, tracking a steady Dubai benchmark, or drop it slightly by 10 cents a barrel, a Reuters survey of five refiners showed.
The March OSP for Arab Extra Light crude could fall by up to 40 cents a barrel after naphtha margins weakened from last month, they said.
The market will be closely watching how state oil giant Saudi Aramco prices its heavier grades after the imposition of sanctions on Venezuelan crude exports to the United States. Venezuela mainly produces heavy crude oil.
One respondent expects prices for heavier grades Arab Medium and Arab Heavy to rise in March from February, while the rest expect prices to be little changed.
WINDOW: Unipec sold one April Dubai partial to Shell at $60.85 a barrel. That placed cash Dubai's premium to swaps at 64 cents a barrel, the highest since December.
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