Robust Asia Demand Drives ME, Russia Crude Premiums To Multi-Month Highs
SINGAPORE, Sept 20 (Reuters) - Spot premiums for Middle East and Russian crude loading in November and December have hit multi-month highs, spurred by robust demand in Asia, trade sources said on Wednesday.
Asian buyers snapped up spot cargoes this month after Saudi Aramco and Abu Dhabi National Oil Company cut supplies, and as they both prepare to ramp up heating oil production for peak winter demand in the northern hemisphere, the sources said.
Profits for producing oil products from a barrel of crude held strong at above $8 a barrel, encouraging refiners to keep operating rates at high levels.
"It's a hot, hot market," a Singapore-based trader said.
Abu Dhabi's flagship crude Murban loading in November traded at premiums of about 60 cents a barrel above its official selling price, a level not seen in 18 months, according to trade sources and Reuters data. <MUR-1Madn->
Thailand's demand for Murban has also been strong, with PTT Plc buying four cargoes in a tender.
Traders have put the November value for another Abu Dhabi grade Das <DAS-1Madn-A> at a similar level to Murban. These grades are light in quality, which produces more middle distillates such as diesel and kerosene.
Russia's Sakhalin Energy sold two cargoes of Sakhalin Blend crude for December loading at $2.55-$2.80 a barrel above Dubai quotes, the highest premiums in 10 months, the sources said.
Strong demand for medium grades, especially those that can be delivered during S&P Global Platts' pricing process, also lifted spot premiums.
For example, Qatar's al-Shaheen crude loading in November have sold at the strongest premiums in more than two years after Japan's top refiner JXTG Holdings bought two cargoes, while oil majors Royal Dutch Shell and Total purchased one each.
DME Oman's spot premium to Dubai swaps touched a seven-month high on Tuesday's close. <OMA-1Mdubsw-A>
Still, demand from world's largest oil importer China is cooling off as most of the country's independent refiners have used up their quotas, traders said.
This has probably capped spot premiums for Russian ESPO crude, which typically heads to China, at about $2.50 a barrel to Dubai quotes, they said. <ESPO->
China's private refiners have been responsible for driving the country's crude import demand over the past two years, with their imports expected to exceed 2 million barrels per day this year.
(Reporting by Florence Tan; Editing by Sherry Jacob-Phillips and Tom Hogue)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- US Confirms Reimposition of Oil Sanctions against Venezuela
- Analyst Says USA Influence on Middle East Seems to be Fading
- Brazil Court Reinstates Petrobras Chair to Divided Board
- Russian Ships to Remain Banned from US Ports
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally