Middle East crude benchmarks Oman and Dubai edged higher on Tuesday after some Chinese buyers requested less supply from Saudi Arabia, suggesting that they will need to seek cargoes from the spot market.
Saudi Aramco 2222.SE has informed some clients in North Asia they will receive full nominated volumes of crude oil in August, several sources with knowledge of the matter said on Tuesday, while top buyer China once again requested less supply.
The sources estimated the combined volume that the Chinese refiners, both state-owned and mega-sized independent, have asked to lower could be about 8 million barrels.
Some Chinese refiners, however, both state-owned and mega-sized independent refineries, have asked for lower supply in August, according to four trading sources.
The Chinese refiners would seek to increase procurement from the spot market to make up the Saudi supply. As the Brent/Dubai EFS narrows, they may look to bring cargoes from further afield such as West Africa and Latin America.
Sour crude from the United States is less attractive to Asian refiners at the moment, traders said. Medium sour crude Mars for September delivery is traded at about $3.7 a barrel over the Dubai quotes in Asia on the delivered-ex-ship (DES) basis, significantly higher than the Middle Eastern crude with the same quality.
OSP
Iraqi oil marketing company set the August Basrah Medium crude price to Asia at $0.40 per barrel over Oman/Dubai average, up 50 cents from the prior month.
It also hiked August Basrah Heavy crude price by 60 cents to minus $2.65 per barrel over Oman/Dubai average to Asia.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps rose 6 cents to $1.38 a barrel.
NEWS
Indonesia’s coast guard said on Tuesday it seized an Iranian-flagged supertanker suspected of involvement in the illegal transshipment of crude oil, and vowed to toughen maritime patrols.
Global energy demand is forecast to rise 23% through 2045, Haitham Al Ghais, the secretary general of the Organization of Petroleum Exporting Countries (OPEC), said on Tuesday at a Nigerian oil and gas conference.
Kazakhstan’s daily oil output slipped to 225,700 metric tons on July 10 from 225,900 tons a day earlier, Energy Ministry data showed on Tuesday, remaining significantly lower than before the July 3 regional power outage that hit production.
Oil demand from China and developing countries, combined with OPEC+ supply cuts, is likely to keep the market tight in the second half of the year despite a sluggish global economy, the head of the International Energy Agency (IEA) said on Monday.
Source: Reuters (Reporting by Muyu Xu; Editing by Sonia Cheema)