The Middle East crude benchmarks were mixed on Thursday with Oman slipping to a wider discount while Dubai was supported by purchases by Shell of three August partials from Unipec and Reliance.
MIDEAST Unsold supplies from previous months and lower demand from China are depressing Oman’s value this month, traders said. Almost 10 percent of China’s refining capacity is set to be shut down during the third quarter, signalling that demand growth from the world’s biggest crude importer is flagging. Abu Dhabi’s flagship Murban is also weighed down by supplies in storage although discounts for August-loading cargoes have held at about 15 cents to its OSP. A Thai refiner has bought four cargoes of Murban crude for August-loading around this level. Das crude, in comparison, stayed in the positive territory as its OSP was more attractive. At least one Das cargo has been sold to Thailand at parity to its OSP. RUSSIA Sakhalin Energy has sold five cargoes loading in late August to September at $1-$1.60 a barrel above Dubai quotes, in line with higher premiums from last month. Russian ESPO premiums held steady.
Trafigura has sold ESPO cargoes loading in the first 10 days of August at 70-80 cents a barrel above Dubai quotes. Gazprom may have sold a cargo for loading on Aug. 3-13 at a premium of 80-90 cents. TENDERS Taiwanese refiner CPC does not plan to issue a tender to buy sour crude this month. A trader said this was due to an issue at the company’s residue desulphuriser unit. Bahrain’s BAPCO has sold at least two Banoco Arab Medium cargoes in its tender at discounts to its OSP. One trader put the discount at 25-30 cents while another said it could have widened to 40 cents.
WINDOW: Cash Dubai’s discount to swaps narrowed 11 cents to 51 cents after Shell bought three August partials from Unipec and Reliance.
PRICES ($/BBL) CURRENT PREV SESSION
DME OMAN 43.55 44.47
DME OMAN DIFF TO DUBAI -0.51 -0.47
CASH DUBAI 43.55 44.32
Dubai has set its official differential to Oman futures for September at a discount of $0.05 per barrel, unchanged from the previous month, state news agency WAM reported on Wednesday citing the Dubai Department of Petroleum Affairs. REFINERY Japanese refiner Fuji Oil Co said it restarted its sole 143,000-barrels-per-day (bpd) crude distillation unit (CDU) at its Sodegaura refinery, east of Tokyo, on Thursday as planned after scheduled maintenance. Sinopec Corp’s Shijiazhuang refinery will shut down its 160,000 barrels per day (bpd) crude unit from July 1 for planned overhaul that lasts until mid-August, according to a company official on Thursday. PetroChina’s Ningxia refinery, in northern region of Ningxia, plans to shut its 100,000 bpd crude unit for major maintenance, the first time since 2014, the company said on its website on Thursday. It didn’t specify the duration.
NEWS Some of China’s top oil refineries are having to take the highly unusual step of cutting operations during what is typically the peak demand summer season when hot weather drives up power usage and families take to the road during school holidays. OPEC members are considering further oil output cuts but should wait until the effect of the current reduced level of production is made clear, Iran said on Wednesday, hinting at possible further OPEC action after oil sank to a seven-month low. Fuel oil profit margins have surged to their highest in more than five years on lower supplies and rising demand from electric power generators, which may push some refiners to increase their runs. Crude oil’s bear market is highlighting the haves and have nots among U.S. shale producers, with the stronger promising to keep pumping even as prospects dim for some of their financially strapped peers. Australian fuel supplier Caltex Australia said on Thursday it expects underlying half-yearly net profit to rise as much as 22 percent as it benefited from higher refiner margins and bigger volumes of premium diesel sales.
Source: Reuters (Reporting by Florence Tan and Olga Yagova. Editing by Jane Merriman)