Middle East crude benchmarks Oman, Dubai and Murban edged higher on Friday, supported by firm refining margins and robust trade in the spot market.

Profits at a typical Singapore refinery processing Dubai crude hit a seven-month high of $13.63 a barrel this week, encouraging refiners to increase crude purchase and to step up production.

Qatar Energy raised the price for term cargoes of al-Shaheen crude oil loading in October to a four-month high, trade sources said on Friday, as demand for Middle Eastern oil increased after Saudi Arabia prolonged its voluntary supply cut.

The October price was set at $2.10 a barrel above Dubai quotes, up 42 cents from September’s $1.68 a barrel, reaching the highest since June.

CHINA FUEL EXPORTS

China’s muted economic growth in 2023 due to an its underwhelming post-COVID recovery has crimped the outlook for demand for diesel fuel, the oil product that is the lifeblood of the economy, paving the way for continuing firm exports.

Exports of fuel products from China more than doubled in July from a year earlier, data showed on Friday, as refiners maintained high run rates and took advantage of strong export margins.

OSP

Iran has set the official selling price (OSP) of its Iranian Light crude oil grade for Asian buyers at $3.45 a barrel above the Oman/Dubai average for September, an industry source with knowledge of the matter said on Friday.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps gained 3 cents to $2.04 a barrel.

Glencore will deliver one October Oman crude each to Gunvor and BP following the trades. Reliance will deliver one October Upper Zakum crude to Vitol.

NEWS

Asian refiners are on the hunt for crude oil to replace Kuwaiti supply as the OPEC producer cuts exports by nearly a fifth to feed its huge new refinery, which is driving up prices for other sour crudes and likely to squeeze profit margins.

Spot discounts for Russian crude for September loading have started to deepen as India, a key customer of Moscow, reduces purchases due to high prices and maintenance outages at some refineries, four traders and Indian refinery officials said.

China, the world’s top crude importer, is drawing on record inventories amassed earlier this year as refiners scale back purchases after OPEC+ supply cuts drove global prices above $80 a barrel, traders and analysts said.
Source: Reuters (Reporting by Muyu Xu; Editing by Sonia Cheema)