Markets

Asia Pacific crude weaker; Sokol, Chim Sao premiums fall

Published October 16, 2014 Updated October 16, 2014 12:03pm

SINGAPORE: The Asia-Pacific crude market weakened on Thursday as a combination of poor refining margins and a glut of crude in the region weighed on differentials.

Oil prices continued to slide, with Brent crude futures falling to a four-year low below $83 a barrel as growing concerns over the global economy stretched a four-month rout.

Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), was unchanged at $1.75 a barrel.

TENDERS

PV Oil, the marketing arm of PetroVietnam, may have sold three December-loading cargoes of Chim Sao crude at a premium to Dated Brent of slightly below $3 a barrel, traders said.

Last month, Chim Sao was sold at a premium of $3-$3.50 a barrel, according to Reuters data. The details of the tender were not clear.

The premium for Russian Sokol crude also fell. ONGC sold a cargo loading Dec. 15-18 to a trading firm at less than $4 a barrel above Oman/Dubai quotes, traders said. ONGC last month had sold Sokol at a premium of $4.25-$4.50 a barrel, according to Reuters data. The deal could not be independently verified.

Indian Oil Corp (IOC) bought a VLCC of Bonny Light in a tender from Shell and Total, a trader said.

MARKET NEWS

Long-term U.S. crude oil markets flipped into contango this week for the first time in years as the dizzying descent in prices unleashed a wave of hedging by oil producers fearing prices may not stay above $80 a barrel for long.

Saudi Arabia effectively started a global oil price war this month aimed at quickly denting U.S. oil output. Slowing a U.S. drilling boom, however, could take more than a year.

Woodside Petroleum Ltd, Australia's largest independent oil and gas producer, beat analysts' forecasts, reporting a 15 percent rise in third-quarter production and a 46 percent rise in revenue.

The falling price of crude and a global price war are disadvantageous for everyone in the international oil market, the new head of Venezuela's state oil company PDVSA said on Wednesday.

Copyright Reuters, 2014