Middle East crude benchmarks Oman, Dubai and Murban extended gains on Thursday as sour crude tightness concerns continued to dominate the market.

Russian medium sour Urals oil jumped $2-$3 above the $60 per barrel Western price cap, boosted by strengthening in international benchmark Brent and additional export cuts announced by Russia in August, Reuters calculations based on traders’ data showed.

The movement of Urals could be hindered as the cargoes would no longer be able to access western insurance and shipping services.

The premium of Brent-pegged crude to Dubai-linked oil, known as Brent/Dubai EFS, reached $1.42 a barrel, the highest level in a month. A higher EFS would dent the margins for Asian buyers hauling oil from West African and Latin American regions where Brent is used as a pricing benchmark.

Asian refiners have taken advantage of low EFS over the past weeks to increase purchases of Atlantic Basin oil, such as Brazilian crude, traders said.

OSP

Kuwait raised the official selling price (OSP) for Kuwait Export Crude (KEC) to Asia in August by 30 U.S. cents from the previous month to $2.25 a barrel above the average of Oman/Dubai quotes, a price document reviewed by Reuters showed on Wednesday.

The producer also increased the August Kuwait Super Light Crude (KSLC) OSP to $2.25 a barrel above Oman/Dubai quotes, 10 cents higher than the previous month.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 57 cents to $2.00 a barrel. Trafigura will deliver a September-loading Oman cargo to Equinor following the trades.

NEWS

Oil demand is set to hit a record high this year and the market is tightening but economic headwinds and interest rate hikes have deflated growth expectations slightly, the International Energy Agency (IEA) said on Thursday.

China’s crude oil imports in June jumped 45.3% on the year to the second-highest monthly figure on record, customs data showed on Thursday, with refiners building up inventories despite tepid domestic demand.

Asia’s spot diesel prices have rebounded to premium levels for August-loading cargoes, prompting more refiners to offer cargoes this week, trade sources said on Thursday.

Saudi Arabia imported record volumes of discounted Russian fuel oil in June, a near 10-fold annual increase to meet summer power generation demand and maintain crude exports despite OPEC+ production cuts, according to traders, analysts and Kpler data.

U.S. crude stocks rose much more than expected last week as the United States posted higher net crude imports, the Energy Information Administration said on Wednesday, while gasoline inventories were largely flat during the Fourth of July holiday week when analysts had expected a big draw.
Source: Reuters (Reporting by Muyu Xu; Editing by Sonia Cheema and Janane Venkatraman)