Murban, a light sour Middle Eastern crude benchmark, rose to a two-month high on Thursday as a wide Brent/Dubai spread following the Red Sea tension made regional light grades more attractive to Asian refiners.
The escalating conflict in the Middle East has widened the spread between Brent- and Dubai-linked crude to $1.48 a barrel from about $0.5 a barrel in the previous month.
Spot premium for Murban climbed to $1.58 a barrel over Dubai quotes, a level last seen in mid-November.
Several shipping firms have halted vessel transits in the Red Sea. One very large crude carrier (VLCC), Tosa, owned by Japan’s Nippon Yusen, has cancelled its plan to load oil from Saudi Arabia’s Yanbu port on Jan. 27 bound for northeastern Asia, Kpler data showed.
Tosa is now scheduled to load oil from Ras Tanura port in the Persian Gulf side of Saudi Arabia on Feb. 1.
Middle East oil markets looked set for further volatility in 2024, extending heightened volatility last year, the Dubai Mercantile Exchange (DME) said on Thursday, amid producer supply cuts and record U.S. output.
In the spot market, Qatar Energy raised the price for term cargoes of al-Shaheen crude oil loading in March after selling the grade at a years-low in the previous month, trade sources said on Thursday, bolstered by improved demand this month.
The March price was increased to a premium of $0.88 a barrel above Dubai quotes, up from February’s discount of about $0.90 a barrel.
Meanwhile, Vietnam’s PV Oil sold three March-loading Su Tu Den crude cargoes likely at premiums of about $4 a barrel over the Dated Brent, trading sources said.
That was lower than last month’s about $5 a barrel as the increasing supply of Vietnamese crude to Asian market weighed on prices.
PV Oil is also seeking to sell three March Bach Ho Light crude cargoes via a tender, which will close on Jan. 19 and be valid until Jan. 29.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps fell 10 cents to $0.93 per barrel.
NEWS
Saudi Arabia’s cut in official crude oil selling prices to Asia reflects weaker fundamentals of supply and demand and does not imply a looming shift in OPEC+ policy or a fight for market share, analysts and industry sources said.
The International Energy Agency (IEA) on Thursday made a further upward revision to its 2024 oil demand growth forecast, though its projection remains dramatically lower than producer group OPEC’s expectations.
The re-routing of a growing number of ships around Africa to avoid potential attacks in the Red Sea is altering refueling patterns and boosting demand for bunker fuel at far-flung ports, from the Mauritius to South Africa to the Canary Islands.
Oil production in North Dakota was estimated to have dropped by more than half its typical output because of extreme cold and related operations challenges, the state’s pipeline authority said on Wednesday.
Source: Reuters (Reporting by Muyu Xu; Editing by Sohini Goswami)