Middle East crude benchmarks Oman, Dubai and Murban extended gains on Monday as the arbitrage window for U.S. crude to Asia closed amid the widening Brent/Dubai spread and rising freight rates.

The spread between Brent- and Dubai-linked crude pegged at $0.85 a barrel, its widest level in two weeks, as concerns over tight supply in the west of Suez market heightened after Libya claimed force majeure at its Sharara oilfield due to protests in the area.

Freight rates to haul crude oil from the United States to Asia have risen over the past days, making WTI crude more expensive than Murban on a delivery basis, according to three trading sources.

Meanwhile, top oil exporter Saudi Arabia on Sunday cut the February price of its flagship Arab Light crude to Asian customers to the lowest level in 27 months, a company statement showed, amid competition from rival suppliers and concerns about supply overhang.

“A more friendly Saudi crude prices could attract refiners to nominate more February-loading cargoes,” said one trader.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 9 cents to $0.72 per barrel.

NEWS

India’s fuel consumption rose to a seven-month high in December to about 20.054 million metric tons, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed.

OPEC oil output rose in December, a Reuters survey found on Friday, as increases in Iraq, Angola and Nigeria offset ongoing cuts by Saudi Arabia and other members of the wider OPEC+ alliance in support of the market.

India’s Oil and Natural Gas Corp (ONGC) ONGC.NS said on Monday it expected total oil output to climb 11% after its project off the country’s east coast started producing oil.

Early data indicates global oil consumption in December grew at the slowest pace in nine months, J.P. Morgan said in a note on Friday.
Source: Reuters (Reporting by Muyu Xu; Editing by Sonia Cheema)