|07 June, 2018

Middle East Crude-Benchmarks stay firm on Venezuelan supply concerns

Middle East crude benchmarks were firm on Wednesday

SINGAPORE- Middle East crude benchmarks were firm on Wednesday with DME Oman and cash Dubai staying at premiums above $1.20 a barrel against Dubai swaps as Venezuela may have to scale back exports this month amid bottlenecks at its ports.

Concerns about Venezuelan and Iranian supplies could keep August-loading medium and heavy sour grades well supported while light grades remained under pressure amid ample supplies, traders said.

IRAQ: South Korea's KOGAS has awarded a tender to sell 4 million barrels of Basra Light crude loading in the second half of 2018 at a premium of about 65 cents a barrel to its OSP, a trader said.

It was not immediately clear who won the tender. The buyer will lift four cargoes of 1 million barrels during the months that KOGAS receives allocations from SOMO, according to the tender document.

Iraq has started shipping crude oil through its Iraqi Oil Tankers Company (IOTC) for the first time since 1991, the oil ministry said.

The two million barrel cargo is destined for the United States, the ministry said in a statement.

A trading source familiar with the matter said Valero chartered the vessel from IOTC.

KUWAIT: Kuwait Petroleum Corporation (KPC) has started producing a light crude and the first cargo of the new grade is expected to be exported by the end of June, Kuwait's oil minister Bakhit al-Rashidi said. 

QATAR: Qatar Petroleum will close its monthly tender to sell spot deodorised field condensate and low-sulphur condensate on June 12 with bids valid until a day later.

RUSSIA: ONGC sold a Sokol cargo loading on July 30-Aug. 5 to Glencore at $4.50-$4.60 a barrel above Dubai quotes, trade sources said. The premium was in line with the previous trade.

WINDOW: Cash Dubai's premium to swaps eased 2 cents to $1.20 a barrel. Seller-Buyer Price Unipec-Shell 73.55 Unipec-Shell 73.55 Unipec-Glencore 73.55 Unipec-Gunvor 73.55 Reliance-BP 73.56

Oil price agency S&P Global Platts will launch a price assessment of Murban crude oil differential to Dubai from July 2, it said in a note to subscribers. 

REFINERY

Vietnam's second oil refinery Nghi Son, which is expected to be fully operational by early August, will export its first petrochemical products later this month, the plant's chief executive officer told Reuters

The refinery is expected to reach full operation in August.

NEWS

Iraq and Iran have not yet begun exchanging crude oil, for technical reasons, Iraqi Oil Minister Jabar al-Luaibi said on Wednesday, contradicting Iran's oil ministry news agency. 

India's oil minister said on Wednesday Saudi Arabia and other OPEC producers are "revisiting" their output-cutting policy, referring to a discussion he had with his Saudi counterpart.

Venezuela is nearly a month behind in shipping crude to customers from its main oil export port, according to Reuters data, as chronic delays are compounding production declines and could breach state-run PDVSA's crude supply contracts if they are not quickly cleared. 

U.S. oil producer Occidental Petroleum Corp expects U.S. crude exports to more than triple, adding about 3.6 million bpd, over the next five years, a company executive said at an industry conference. European refiners are winding down oil purchases from Iran, closing the door on a fifth of the OPEC member's crude exports after the United States imposed sanctions on Tehran, company and trading sources said. 

For crude prices, oil product cracks and refining margins, please click on the RICs below.

(Reporting by Florence Tan; Editing by Sunil Nair) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))

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