Middle East crude benchmarks Oman, Dubai and Murban edged down on Thursday despite a flurry of trades on the window, which saw the delivery of another five August-loading Oman cargoes.
In spot trades, premiums for August-loading Upper Zakum crude rose on robust demand after several more cargoes were traded on Wednesday.
Rongsheng, Trafigura and Glencore were among the buyers of the cargoes at premiums of more than 80 cents a barrel to its official selling price (OSP), traders said.
ExxonMobil, Cosmo Oil and Eneos have bought several Das crude cargoes, one trader said, although the price levels were not immediately known.
Otherwise, trade was muted on Thursday as traders await for the results of Qatar’s al-Shaheen crude tender, which will be awarded later in the day.
Separately, Petronas has set the July price factor for its benchmark crude grades at $6.40 a barrel, up 50 cents from the previous month.
FREIGHT
The costs of chartering supertankers to move crude oil from the Middle East to Asia have jumped to the highest since April as more cargoes are being booked in June, according to industry sources and data on Refinitiv Eikon.
The rate for a Very Large Crude Carrier (VLCC) from the Middle East to China, Japan and Singapore is assessed at just above worldscale 80 on Thursday, according to shipbroking firm Meiwa International, the highest levels since April.
Similarly, the freight cost for a VLCC on the U.S. Gulf Coast-China route jumped nearly $500,000 to $9.34 million on June 14, according to Meiwa.
ARBITRAGE
The price spread between Dubai and West Texas Intermediate has widened to more than $6 a barrel, making WTI attractive for buyers such as South Korea.
On a delivered basis, prices for WTI and Murban were close to being on par, traders said.
However, freight rates are rising, while some market participants expect spot premiums for August-loading Murban to weaken further, which may negate their need to buy WTI.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps fell 4 cents to 70 cents a barrel. Five August-loading Oman crude cargoes were delivered, bringing the month’s total to 32. Unipec delivered one cargo each to Equinor, Totsa and PetroChina Hong Kong, increasing the Chinese major’s tally for this month to 24. Gunvor and Vitol delivered one Oman cargo each to Total and PCHK, respectively.
REFINERY
China’s oil refinery throughput in May rose 15.4% from a year earlier, data showed on Thursday, as refiners brought units back online from planned maintenance and independent refiners processed cheap imports.
Shell SHEL said on Wednesday it is conducting a strategic review of energy and chemicals assets on Bukom and Jurong Island in Singapore.
NEWS
Shell said it will ramp up its dividend and share buybacks while keeping oil output steady into 2030, as CEO Wael Sawan moved to regain investor confidence that wavered over its energy transition plan.
The boost to oil demand from the post-pandemic recovery is set to end this year, the International Energy Agency(IEA) said on Wednesday, with a slowing economy and the transition to cleaner fuels sapping growth from 2024.
South Korean jet fuel exports to the United States in June are headed for a near two-year high as oil traders cash in on stronger U.S. demand as Asia’s aviation sector is still recovering, industry sources said.
Source: Reuters