In Oil & Companies News 14/04/2015
Traders are awaiting information about the quality of Iraq’s new Basrah Heavy crude grade, despite the release of a new official selling price for the grade for May.
Iraq’s crude oil marketing organization SOMO issued fresh OSPs for its crude oil grades loading in May on Sunday, including the first-ever official selling price for its Basrah Heavy crude grade, due to load from the country’s southern export terminals in conjunction with the more traditional Basrah Light crude.
For cargoes destined for Europe, the price of the newer grade has been set at Dated Brent minus $8.45/barrel, a $3.45/b discount to Basrah Light at $5/b.
But market sources said the lack of information about the quality of the grade — its density, sulfur content and product yield — has limited the interest from European end-users for May cargoes.
“[Refiners] have asked them to give an indication of the API to show an interest in buying it, but [SOMO] hasn’t given out that information, so [they haven’t] been all that inspired to buy it,” a crude trader said.
“It really depends on the API,” another trader said. “If the API is 22 degrees, than [the OSP] is not good. If the API is closer to 24 or 25 degrees, it might be okay. Sixty cents does not cover the loss in quality of one API degree.”
“It is one thing to get an OSP,” a crude trader said. “It is another to know what you’re buying.”