Markets

Asia-Pacific Crude-June ESPO premium hits six-month low

Published April 19, 2016 Updated April 19, 2016 01:49pm

SINGAPORE: Russian crude premiums remained weak in Asia after Surgutneftegaz sold two June-loading cargoes at the lowest premiums in about six months as unsold supplies from the previous month weighed on the market, trade sources said on Tuesday.

For loading mostly in June, Surgut has sold two 730,000-barrel cargoes at $2-$2.20 a barrel above June Dubai quotes to Unipec, the sources said. The cargoes will load between May 31 and June 5, and between June 3 and June 8.

Trafigura has also sold a cargo loading on June 1-10 at a premium of $2.20 a barrel, traders said.

Litasco may still be holding onto a cargo to load between May 5 and May 7, they said.

Still, ESPO may receive some support as a planned pipeline maintenance in June could reduce exports to 2.3 million tonnes, down from an all-time high of 2.83 million tonnes in May.

Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS), rose 18 cents to $3.76 a barrel on Tuesday, a fresh high in more than three months, putting pressure on Brent-linked grades in Asia.

PV Oil has kicked off a second round of talks with potential bidders for Su Tu Den supplies between July and December.

The Vietnamese state oil marketer offered its supplies at $2 a barrel above dated Brent, almost $1 higher than the previous term price.

PV Oil also issued a tender to sell a 300,000-barrel Ruby cargo for June 7-13 and a 350,000-barrel cargo for June 21-27. The tender will close on April 20 with bids valid until a day later.

Sakhalin Energy will close a tender on Tuesday to sell 730,000 barrels of Sakhalin Blend for loading between June 15 and June 22. Bids will remain valid until Wednesday.

Pertamina and Taiwan's CPC are seeking West African crude via tenders. Pertamina plans to buy two-three cargoes of Nigerian crude for July-December delivery to Cilacap and Balikpapan in a tender, which will close on April 21 with bids valid until April 27.

CPC is expected to award its tender on Thursday.

REFINERY

East China Shandong-based independent refinery Wudi Xinyue Fuel Chemicals Company has won a preliminary annual crude oil import quota of 2.4 million tonnes, the China Petroleum & Chemical Industry Federation said late on Monday.

Ecuador's 110,000 barrel-per-day Esmeraldas refinery restarted at partial capacity on Monday night and will be fully operational in a week after a precautionary stoppage because of a major quake, the head of state oil company Petroecuador told Reuters.

Japanese oil refiner TonenGeneral Sekiyu KK said it restarted its 78,000-barrel-per-day (bpd) No.3 crude distillation unit (CDU) at its 258,000-bpd Kawasaki refinery on Sunday afternoon after scheduled maintenance.

MARKET NEWS

Iran's crude oil production will reach pre-sanctions levels within two months, a deputy oil minister was quoted as saying on Tuesday, reaffirming Tehran's commitment to boosting production.

Latin American crude producers under financial strain may help provide a vehicle for market rebalancing that OPEC members and other oil states failed to deliver at a meeting in Doha on Sunday.

Nigeria's state oil company is in a standoff with energy giants ExxonMobil and Royal Dutch Shell over ownership of physical crude cargoes as the West African nation seeks to shore up its creaking budget.

Angola plans to export 1.7 million barrels per day (bpd) of crude oil in June, up from the 1.68 million bpd initially planned for May, according to initial loading plans seen by Reuters.

Copyright Reuters, 2016