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Middle East Crude-Benchmarks slip; China lifts more Saudi volumes for August

Wednesday, 10 July 2024 | 00:00

Middle East crude benchmarks Oman, Dubai and Murban slipped for a second straight session this week, with the market seeing a flurry of open window activity after stronger liftings of August contract barrels from Saudi Arabia to China.

Saudi crude oil exports to China willrise in August to at least 44 million barrels after deep price cuts by state energy firm Saudi Aramco 2222.SE supported demand, several trade sources said on Tuesday.

The exchange of futures for swaps, typically used as a gauge to check on the east-west arbitrage movements, fell by 10 cents from the previous session.

Analysts were cautious on further demand outlooks, given that fourth-quarter maintenance season would be back to limit the refiner’s offtaking activity.

“Global crude buying is currently focused on mid to late Q3; in a few weeks’ time, we will be moving into a buying period that reflects the turnaround season in both the West and the East, which, all else equal, should see renewed pressure on the physical market,” said Sparta Commodities’ Neil Crosby in a client note.

Meanwhile, in the West, impact on refining runs is likely minimal from weather issues as some key oil majors are slowly bringing their units back online after Hurricane Beryl turned into a tropical depression.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps fell 5 cents to $1.66 a barrel.

REFINERY

– Marathon Petroleum Corp MPC.N began preparing on Monday to restart multiple units at its Galveston Bay oil refinery in Texas City, Texas, following a power outage earlier in the day, people familiar with the plant operations said.

– Phillips 66 on Monday reported that units at its 265,000 barrel-per-day (bpd) Sweeny refinery in Texas were operating normally after an upset caused by Hurricane Beryl, according to a regulatory filing.

– Rosneft’s ROSN.MM Black Sea oil refinery in Tuapse resumed operations on July 1 after being offline since a drone attack in mid-May, three industry sources familiar with the plant’s work told Reuters.

NEWS

– BP expects lower realised refining margins and weak oil trading to hurt its second-quarter earnings, the oil firm said on Tuesday.

– A double whammy of record heat and hurricanes should test U.S. refiners’ resilience in coming weeks, raising the risk of extremely volatile fuel prices in the middle of the peak travel season, analysts said.
Source: Reuters (Reporting by Trixie Yap and Florence Tan; Editing by Vijay Kishore)

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