Middle Eastern light sour benchmark Murban slid on Tuesday, pressured by arbitrage cargoes from the West of Suez market as the spread between Brent- and Dubai-pegged oil almost reached parity.
The spread narrowed to only 3 cents a barrel, from 72 cents last week, making crude oil from Atlantic Basin more economical for Asian refiners.
Spot premium for Murban crude was $1.55 a barrel over the Dubai quotes, down from $1.72 a barrel on Monday.
Meanwhile, Iran set higher targets for its oil output and exports next year, which could help further mitigate the impact of OPEC+ supply cut in global supply.
Iran’s oil production should reach 3.6 million barrels per day (bpd) by March 20, 2024, Iran’s oil minister Javad Owji said on Tuesday according to semi-official Tasnim news agency, up from the current level of 3.4 million bpd.
The country also set the budget proposal for the Iranian year starting March 20, 2024 is based on oil exports of 1.35 million bpd, compared with 1.2 million bpd for the current 2023-2024 year.
In spot market, Vietnam’s PV oil sold a cargo of Chim Sao crude, for January 16-20 loading, at about $8 a barrel against dated Brent to Thailand’s PTT, according to trading sources.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps dipped 9 cents to $1.68 per barrel.
Total will deliver one January-loading Murban cargo each to Glencore and Vitol following the trades.
NEWS
As the world’s most powerful oil producers ponder further supply cuts, Russia has little incentive for a radical change as its energy revenue is strong, oil prices are higher than its forecasts and its budget deficit is narrowing.
U.S. crude and gasoline stockpiles likely rose last week, while distillates inventories were seen dropping, a preliminary Reuters poll showed on Monday.
Norway’s natural gas output rose in October from a four-year low in September but still lagged an official forecast, while crude oil production also fell behind expectations, the Norwegian Petroleum Directorate (NPD) said on Tuesday.
Source: Reuters (Reporting by Muyu Xu; Editing by Mrigank Dhaniwala)