Middle East Crude-Benchmarks rebound; ESPO premiums fall

SINGAPORE: Middle East crude benchmarks rebounded on Thursday, the last trading day of the month.

SAUDI OSP PREVIEW: Saudi Arabia is expected to raise April prices for most of the crude grades it sells to Asia, following a strengthening of Middle East oil benchmark Dubai over the past month, several trade sources said.

The April official selling price (OSP) for flagship Arab Light crude could remain unchanged or rise by up to 35 cents a barrel from the previous month, four refining sources said in a Reuters survey.

Arab Heavy OSPs for April may rise as much as 50 cents a barrel, the sources said.

"They increased prices last month, and I'm not sure how much the supply disruptions from Iran and Venezuela are already priced in," said a source with a north Asian refiner.

"Medium grades may still go up on perceived tightness with Iran and Venezuelan sanctions, although at the end of this month's trading, there were still plenty of cargoes around."

The respondents expect Arab Extra Light's April OSP to rise by 20 to 25 cents a barrel.

IRAN: Asia's crude oil imports from Iran dipped in January to the lowest in two months after top buyers China and India slowed down purchases and as Japan recorded zero imports for a third month, government and trade data showed.

Asia's top four buyers of Iranian crude - China, India, Japan and South Korea - imported a total 710,699 barrels per day of crude from Iran in January, 49 percent lower than the same month in 2018, the data collated by Thomson Reuters showed.

Imports by Japan and South Korea are set to pick up in the months up to May as buyers maximize the volume of oil they can lift during the waiver, trade sources said.

February imports into Asia are expected to nearly double to 1.38 million bpd, Refinitiv data showed.

RUSSIA: Surgutneftegaz has sold April-loading ESPO crude oil cargoes at the lowest premiums in three months on a strong Dubai benchmark and lukewarm demand from China, trade sources said.

The producer sold six cargoes at premiums of about $2.20 to $2.40 a barrel above Dubai quotes, they said, the lowest premiums seen for the grade since January-loading cargoes.

The cargoes will load on April 6-10, 9-13, 13-17, 16-20, 21-25 and 25-29. Buyers include Unipec, ChemChina, Vitol and CNOOC, the sources said.

ESPO's premiums fell after Middle East oil benchmark Dubai rose above dated Brent and made the Russian grade more expensive than supplies from Europe and Latin America, the sources said.

"There are too many cargoes and demand is so-so," one of the sources said.

Separately, Rosneft late on Wednesday re-issued a tender to sell an ESPO cargo loading on April 1-6, the sources said.

Rosneft is "asking people to improve their bids or put in a new bid for this particular cargo," one of the sources said.

The new tender will close on Feb. 28 with bids valid until March 6.

Rosneft may have awarded two cargoes loading on April 11-16 and 21-26 to its term lifter ChemChina in its first tender, the sources said.

WINDOW: Cash Dubai's premium to swaps rose 11 cents to 42 cents a barrel after 28 April partials were traded. Shell and Vitol bought the partials from Unipec, Lukoil and Reliance. Unipec will deliver an Upper Zakum cargo to Shell following the trades.