02:01 am - Monday 21 April 2014
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Middle East Crude-Oman set to plunge for September trade

By staff - Tue Jul 05, 9:38 am

SINGAPORE, July 4 (Reuters) – Sentiment in the Middle East
crude market weakened on Monday as expectations for significant
drops in Qatari and Saudi official selling prices and falling
cracks led to much lower valuations for cargoes of regional
benchmark Oman.

Spot Oman cargoes for loading in September, the new trading
month, were notionally valued even at discounts of 10 cents a
barrel to Dubai quotes, down from premiums of about 60 cents for
August cargoes traded last month.

Refining margins narrowed across the barrel on Monday,
bolstering expectations for a cut in the OSP for Arab Light,
traders said.

Perceptions of amply supplied markets prevailed as Saudi
Arabia increases production and International Energy Agency
members Japan and South Korea release emergency stockpiles.
Russian ESPO crude remains under pressure and abundant Iraqi
Basrah Light provides another alternative for Asian buyers.

* OSPs

– Abu Dhabi National Oil Company (ADNOC) has lowered the
June retroactive selling price of its benchmark Murban crude by
$1.45 a barrel to $112.15, it said on Monday.

– The May official selling price (OSP) for Murban was at
$113.60 a barrel. ADNOC set the OSPs for Lower Zakum, Umm Shaif
and Upper Zakum at $111.95 a barrel, $111.55 and $107.95,
respectively.

* DME OMAN

– September Oman traded on the DME fell to a discount of 7
cents to Dubai swap quotes at 0830 GMT from a 39-cent premium on
Friday, using the settlement price for DME futures, the ICE
one-minute marker for Singapore and the Brent-Dubai EFS as
calculated by Reuters.

– The Dubai curve structure remained firmly in contango,
including a premium of about 28 cents for September over August
and 24 cents for October over September.

* EAST/WEST

– The Brent/Dubai Exchange of Futures for Swaps (EFS) for
August gained 25 cents to $5.45 a barrel at 0830 GMT, Reuters
data showed. The front-month EFS on June 15 touched $9.20, the
highest intraday value since the spread reached a record of
almost $12 in October 2004.

* IRAN-INDIA DISPUTE

– Iran will not cut oil supplies to India despite warning
refiners it could do so if months of unpaid bills are not
settled soon, the Iranian Oil Ministry’s news website SHANA said
on Sunday.

– “A warning has been sent to those refineries that are
debtors, but sending such a letter does not mean Iran’s oil
exports have been cut, and we have no intention to cut our
exports to the Indian market,” SHANA quoted Mohsen Ghamsari,
head of international affairs at the National Iranian Oil Co.
(NIOC), as saying.

* MARKET NEWS

– The United States sold more than 30 million barrels of
crude from the Strategic Petroleum Reserve in its largest-ever
auction of emergency supplies on Friday, naming independent
refiner Valero the top buyer.

– PetroChina restarted its 200,000
barrel-per-day crude distillation unit (CDU) in its Dalian
refinery in early July after around 40 days’ maintenance, an
industry source said on Monday.

– Ecuador is in the final stages of talks with a Chinese
bank for a $571 million loan, and state oil firm Petroecuador
said on Friday it had signed a deal to sell oil to Chinese
energy giant PetroChina .

– Japan’s power demand fell 5.3 percent in June from a year
earlier, Reuters calculations based on industry data from the
Electric Power System Council of Japan showed on Monday,
compared with an 4.5 percent decline in May.

* CRACK SPREADS

– Gas oil’s August crack slipped 93 cents to a premium of
$17.99 a barrel to Dubai crude, while the September crack was 92
cents lower at $17.84.

– Fuel oil’s August and September cracks widened 76-86 cents
to discount of $6.69 and $7.44 a barrel to Dubai crude,
respectively.

– Naphtha CFR Japan’s August discount to Brent crude widened
40 cents to $8.07, while September’s crack was 39 cents wider at
a discount of $7.47 a barrel.

* OUTRIGHT PRICE

– August ICE Brent LCOc1 was at $111.61 a barrel at 0830
GMT, up 68 cents from Friday.

(Reporting by Alejandro Barbajosa; Editing by Manash Goswami)

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