Middle Eastern crude benchmarks Oman, Dubai and Murban fell on Monday as active Oman crude selling by Unipec on Platts window and concerns over weak demand in China weighed spot premiums.
China’s Unipec, the trading arm of top Asian refiner Sinopec , has emerged as a major seller of August-loading Oman crude this month, a move that has helped to cap benchmark prices despite Saudi Arabia’s plans to cut output next month.
Unipec has sold 10 million barrels of Oman crude since the start of June.
Meanwhile, Saudi Aramco has told at least five customers in North Asia they will receive full nominated volumes of crude oil in July, several sources with knowledge of the matter said on Monday, after it pledged to cut production next month.
Chinese state-owned refiners have requested lower supply in July, according to three trading sources, estimating the combined volume could be about 10 million barrels less than they took for June.
However, China’s total July intake of Saudi crude is likely to stay around the same level as June, as other Chinese refiners have asked for more supply for July from a low base in June.
OSP
Kuwait raised the official selling price (OSP) for Kuwait Export Crude (KEC) to Asia in July by 25 U.S. cents from the previous month to $1.95 a barrel above the average of Oman/Dubai quotes, a price document reviewed by Reuters showed on Monday.
The producer set the July Kuwait Super Light Crude (KSLC) OSP at $2.15 a barrel above Oman/Dubai quotes, 35 cents higher than the previous month.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps fell 20 cents to 61 cents a barrel.
Unipec will deliver two August-loading Oman crude cargoes to Total following the trades. It will also deliver one August-loading Oman each to PetroChina and Shell.
Vitol will also deliver an August Oman crude to PetroChina.
NEWS
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Sunday that the latest OPEC+ agreement involved comprehensive reform while the alliance was working against “uncertainities and sentiment” in the market.
Saudi Arabia wants to collaborate, not compete, with China, the kingdom’s energy minister declared on Sunday, saying he “ignored” Western suspicions over their growing ties.
Pakistan’s Prime Minister Shehbaz Sharif on Sunday said the first cargo of discounted Russian crude oil arranged under a new deal struck between Islamabad and Moscow had arrived in Karachi.
Venezuela’s state energy company Petroleos de Venezuela PDVSA has resumed operation at the catalytic cracking unit at the El Palito refinery, a government-allied legislator and seven sources familiar with the matter told Reuters on Sunday.
Source: Reuters (Reporting by Muyu Xu, editing by Ed Osmond)