SINGAPORE- Spot prices in Asia for condensate, an ultra light crude oil, have plunged this week, dragged down by weak naphtha margins and the prospect of more supplies coming out from Iran, several trade sources said on Friday.
Australian condensate has sold at the deepest discount in five years, while cargoes from Qatar are selling at discounts for the first time in more than a year, according to the sources and data from Reuters and Refinitiv Eikon.
One of four North West Shelf (NWS) condensate cargoes loading in January has been sold at a discount between $4 and $4.50 a barrel to dated Brent, the widest discount since 2013. The discount is about $2 a barrel wider than the last trade for a December-loading cargo.
Qatar Petroleum sold deodorised field condensate (DFC) cargoes via a tender for loading in January at a discount below 50 cents a barrel to Dubai quotes, the sources said, a sharp reversal from premiums of more than $3 a barrel seen most of 2018.
One of the sources said QP may have sold two cargoes at discounts between 50 cents and $1.50 a barrel. QP does not comment on commercial matters.
DFC last traded at a discount for cargoes loading in September 2017.
Asia's naphtha margin, or the profit for producing a tonne of naphtha from Brent crude, fell to the lowest in more than two years on Monday amid ample supplies from the Middle East and Europe.
Prices are also dropping on the potential for Iranian condensate to return to the market after the United States allowed waivers from sanctions for some buyers.
South Korea, the largest condensate buyer in Asia, received a waiver and is preparing to resume purchases of Iranian South Pars condensate.
Australia has also stepped up condensate exports from the new Ichthys gas field while arbitrage supplies from the United States are also heading to Asia, the sources said.
(Reporting by Florence Tan; Editing by Tom Hogue and Christian Schmollinger) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))
