Middle East Crude-Benchmarks fall after India sells reserves

Middle East crude benchmarks Oman and Dubai fell on Wednesday

  

SINGAPORE- Middle East crude benchmarks Oman and Dubai fell on Wednesday, along with spot differentials for several grades following news of India's sale of crude from strategic reserves.

South Korea's Kogas has sold 1 million barrels of September-loading Basra Heavy crude at a deep discount of $2 a barrel to its official selling price to Shell via a tender, traders said.

Qatar Petroleum (QP) has set the term price for al-Shaheen crude cargoes loading in October at $2.62 a barrel above Dubai quotes, the lowest premium in two months, traders said.

The price was set after QP sold three cargoes via a tender at premiums ranging from $2 to $2.68 a barrel, or $2.30 on average, they said.

ExxonMobil and Petronas were among the buyers, they added. The cargoes are for loading on Oct. 2-3, Oct. 27-30 and Oct. 1-31.

For Russian grades, ONGC sold a second Sokol crude loading in October to a South Korean end user at $2.80-$2.90 a barrel above Dubai quotes, the lowest premium in four months.

INDIA SPR SALE

India has begun selling oil from its Strategic Petroleum Reserve (SPR) to state-run refiners as it implements a new policy to commercialise its federal storage by leasing out space, three sources familiar with the matter said. 

The Indian Strategic Petroleum Reserves Ltd (ISPRL) is gradually releasing 8 million barrels from the SPRs to create space to also lease to state-run Mangalore Refinery and Petrochemicals Ltd and Hindustan Petroleum Corp , the sources said, asking not to be named.

ARBITRAGE

India's state-run Bharat Petroleum Corp Ltd is scooping up rising volumes of U.S. crude, people familiar with the matter said, as fuel demand in the Asian country recovers and weak U.S. crude prices make purchases attractive. 

BPCL, the second-largest state-run refiner in India, has purchased about 9 million barrels of U.S. crude for delivery in August, September and October so far, two sources with knowledge of the matter said.

NEWS

China's diesel exports in July plunged 41% from a month ago as refiners neared the end of the first batch of 2021 refined fuel export quotas, while a drop-off in domestic fuel supplies encouraged refiners to prioritise local demand. 

Shares in BHP Group and Woodside Petroleum fell on Wednesday as investors on both sides raised questions about the value of the Perth-based oil and gas group's proposed $29 billion merger with BHP's petroleum arm. 

U.S. shale oil output is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according to the Energy Information Administration's monthly drilling productivity report on Monday. 

Guyana aims to increase its oil royalties and revamp other contract terms as part of a new profit-sharing agreement (PSA) for future crude and gas projects now in its draft stage, the South American nation's vice president said on Tuesday. 

(Reporting by Florence Tan; Editing by Maju Samuel) ((Florence.Tan@thomsonreuters.com; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))


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