The price differential between light sour Murban and medium sour Oman benchmark flipped into negative on Thursday amid pressures from cargoes from the West of Suez.
The price spread flipped into negative, at minus 43 cents a barrel. The last time a negative differential occurred was late-July.
Light sour Murban is typically more expensive than Oman for its better quality and higher yield of middle distillates.
Prices of Murban were depressed partly due to a tail down of spot trade as most refiners have concluded their purchase for the month, while weak demand from the West of Suez pushed down the prices for crude in the Atlantic basin and encouraged Asian refiners to haul oil from farther afield.
Crude oil prices in some of the world’s main physical markets have weakened due to a jump in freight costs and a drop in refining margins, according to traders and LSEG data, suggesting demand weakness that could filter through to the futures market.
OSP
Dubai has set its official differential to Oman futures 1OQc1 for January at a premium of $0.05 per barrel, the Dubai Department of Petroleum Affairs said on Thursday.
The differential will be applied to the average of daily settlements for the front month January Oman contract at the end of November to set Dubai’s official selling price (OSP) for January-loading crude.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps rose 11 cents to $2.30 a barrel.
Reliance and PetroChina will each deliver one December-loading Oman crude cargo to Vitol following the trades.
NEWS
U.S. crude oil stockpiles jumped last week as refinery utilization dropped, while gasoline inventories posted a surprise build, the Energy Information Administration said on Wednesday.
India’s Oil and Natural Gas Corp ONGC.NS hopes to recover over $500 million in dividends pending since 2014 for its stake in Venezuelan projects as sanctions on the nation were eased, a source said on Thursday.
Venezuela’s PDVSA has signed at least two new spot contracts to export fuel oil and asphalt cement, demanding prepayment in euros from customers, according to company documents seen by Reuters on Wednesday, as the state-run oil company begins to turn to cash sales after the U.S. eased sanctions.
U.S. penalties on shippers transporting Russian oil in breach of the G7’s price cap could push more Russian cargoes onto vessels referred to as the ghost fleet and away from mainstream tankers, shipping sources and analysts told Reuters.
Source: Reuters (Reporting by Muyu Xu; Editing by Sohini Goswami)