Middle East crude benchmarks Oman, Dubai and Murban kicked off a new month’s trade at lower levels than last month on Monday, despite OPEC+’s decision to extend supply cuts.
Spot premiums for the three benchmark grades hovered just above $1 a barrel to Dubai quotes, down from last month’s average of $1.50-$1.70 a barrel, amid ample supply.
ARBITRAGE
Chinese refiner Rongsheng Petrochemical 002493.SZ has bought its first Canadian crude cargo via the recently expanded Trans Mountain pipeline (TMX) from TotalEnergies TTEF.PA through a tender, several trade sources said on Monday.
The 500,000-barrel cargo of Access Western Blend (AWB) crude will be delivered to Rongsheng’s refinery in Zhoushan in August, they added.
Sellers of Canadian oil are exploring ways to increase exports to Asia, where demand is growing and as Asian refiners typically pay higher premiums.
However, some Asian refiners are unable to process certain Canadian grades due to their high sulphur and acid content, traders said.
Besides AWB, Totsa has also offered Cold Lake crude from the pipeline to Asian buyers, they added.
Separately in the tender, Rongsheng also bought 2 million barrels of Abu Dhabi Upper Zakum crude from Aramco Trading at 60 cents a barrel above July Dubai quotes before freight charges in the tender, the sources said.
The Chinese refiner also purchased 2 million barrels of West African crude consisting of Congolese Djeno and Angolan Mostarda grades at $2.50-$3 a barrel above July dated Brent on cost and freight basis from Unipec, they added.
SINGAPORE CASH DEALS
Cash Dubai’s premium to swaps was at $1.05 a barrel.
NEWS
OPEC+ agreed on Sunday to extend most of its deep oil output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth, high interest rates and rising rival U.S. production.
Saudi Arabia’s sale of shares in oil giant Aramco 2223.SE drew more demand than the stock on offer within hours of kicking off on Sunday, a deal that could raise up to $13.1 billion in a major test of international appetite for the kingdom’s assets.
South Korean President Yoon Suk Yeol gave the green light on Monday to conduct exploratory drilling for potentially vast oil and gas prospects found off the east coast of the nation that is one of the world’s largest energy importers.
Sinopec Fuel Oil Singapore, a unit of Asia’s largest refiner state-run Sinopec 600028.SS, appointed on Monday oil trader Kua Aik Hong as its trading director to further boost its trade volumes in the world’s largest bunkering hub.
Source: Reuters (Reporting by Florence Tan; Editing by Ravi Prakash Kumar)