Middle East Crude-Benchmarks fall as sour grades weaken

Middle East crude benchmarks Oman and Dubai fell for a second straight session on Thursday

  

SINGAPORE- Middle East crude benchmarks Oman and Dubai fell for a second straight session on Thursday amid weak demand and ample supply, as spot differentials for a few sour crude grades dropped.

Iraq's SOMO added to the supply of spot crude by offering a total of four million barrels of February-loading Basra Light and Basra Medium crude via spot tenders to be closed on Jan. 18. The volume is larger than what has commonly seen in SOMO's recent monthly tenders. 

BP via RIM Trading board sold a cargo of Murban crude, loading Mar. 1-25, at 25 cents below OSP to Trafigura. The grade was traded above OSP in the previous month. 

Total via the market-on-close price assessment offered a Murban crude cargo, loading Mar. 1-25, at 15 cents below OSP, but did not attract any buyers. The offer was lowered by 5 cents from Wednesday. 

Vitol bid a March-loading Upper Zakum crude cargo at 5 cents below Dubai quotes, but did not attract any sellers. The bid was lowered by 20 cents from Wednesday.

ONGC Videsh sold a cargo of Russian Sokol crude, loading over Mar. 14-20, at a lower premium of about $1.20 a barrel above Dubai quotes to Korea's SK Energy via its second spot tender, traders said. 

China's Rongsheng was earlier heard to have bought Sokol crude at about $1.5 a barrel above Dubai quotes from trading house Vitol's storage tank in South Korea, traders said.

In spot trades prior to Qatar Petroleum's monthly tender, March-loading Qatari al-Shaheen crude was heard to be sold at around 50-70 cents above Dubai quotes to Japanese buyers, traders said, adding the grade is also trending lower.

In the delivered market, buying interests from Chinese teapots remain largely muted due to poor margins and weak domestic demand amid restored mobility restrictions to curb the new COVID-19 wave, traders said. Shandong Shida Technology was heard to have bought Angola's Mostarda crude.

REFINERY

Japan's biggest refiner, Eneos Corp, restarted the 127,500 barrel per day (bpd) crude distillation unit (CDU) at its Wakayama refinery in western Japan on Dec. 7 after scheduled maintenance, a company spokeswoman said on Thursday.

Eneos also plans to shut down and dismantle the 120,000 barrels-per-day (bpd) No. 1 crude distillation unit at its Negishi refinery, the company said in a statement, citing falling domestic demand for oil products. 

Japan's Cosmo Oil, a unit of Cosmo Energy Holdings Co Ltd, restarted the sole 86,000 barrel per day crude distillation unit (CDU) at its Yokkaichi refinery in central Japan on Nov. 9 after planned maintenance, a company spokeswoman said on Thursday. 

Taiwan's Formosa Petrochemical Corp has resumed gasoil exports after halting for nearly a year, selling two cargoes of 500,000 barrels each for February loading, a source familiar with the matter said on Thursday. 

NEWS

China's total crude oil imports surged 7.3% in 2020 despite the coronavirus shock earlier in the year, with record arrivals in the second and third quarters as refineries expanded operations and low prices encouraged stockpiling, data showed on Thursday.

U.S. crude oil stockpiles last week fell more than expected, while gasoline and distillate inventories rose as refiners ramped up output to its highest level since August, the Energy Information Administration said on Wednesday. 

J.P. Morgan was the latest major U.S. investment bank to turn positive on Exxon Mobil on Wednesday, just months after its removal from the blue-chip Dow Jones Industrial Average capped a catastrophic year for America's major oil producers.

Capital investment in Canada's upstream oil and gas industry will rise 14% this year to C$27.3 billion ($21.44 billion), the Canadian Association of Petroleum Producers (CAPP) said on Wednesday, although spending remains well below pre-pandemic levels.

(Reporting By Shu Zhang) ((shu.zhang@thomsonreuters.com; +65-6870-3549; Reuters Messaging: Twitter @shuzhang4))

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