Middle East Crude-Dubai rises; Glencore to receive 3 more cargoes

Middle East crude benchmark Oman slipped on Monday

  

SINGAPORE- Middle East crude benchmark Oman slipped on Monday as traders squared off positions towards the end of the month, while cash Dubai's premium dropped despite robust demand on Platts window.

ADNOC ALLOCATION

Abu Dhabi National Oil Company (ADNOC) has planned to supply full volumes of all crude grades to term customers in Asia in December, several sources with knowledge of the matter said on Monday. 

The crude grades include Murban, Umm Lulu, Das and Upper Zakum, the sources said. The United Arab Emirates producer exports the bulk of its crude to Asia.

This will be the first time since the oil price crash in the second quarter last year when the COVID-19 pandemic ravaged demand that ADNOC did not implement any supply cut, they said.

DATED BRENT

The head of world's largest independent oil trader Vitol said on Monday that the company would prefer U.S. West Texas Intermediate (WTI) Midland crude to be added to the North Sea dated Brent benchmark rather than Norway's Johan Sverdrup crude.

"We regard WTI as a pretty adequate substitute for many of the crude grades currently in the benchmark," Vitol's Chief Executive Officer Russell Hardy said at the Platts APPEC 2021 conference.

However, Joel Hanley, global director of crude and fuel oil at Platts, said both grades present their own challenges.

Johan Sverdrup is denser and has a higher sulphur level than other grades in the basket, so it will require a sulphur de-escalator to be put into the dated Brent benchmark, he said.

While WTI Midland is closer in quality to the North Sea grades, it has a freight component that needs to be considered as it takes 17 days to sail from the U.S. gulf coast to the North Sea, Hanley added.

PLATTS CARBON PREMIUM

Carbon emissions released during the process of producing crude oil from Canada's Cold Lake, Iraq's Kirkuk and the U.S. Bakken shale fields will cost producers the most to offset, said global commodities agency S&P Global Platts , ahead of the launch of new carbon pricing instruments from Oct. 1. 

REFINERY

Malaysia's Petronas hopes to restart its Pengerang refinery-petrochemical complex, a joint venture with Saudi Aramco, by year end, Arif Mahmood, Petronas' executive vice president and CEO of downstream, said at the Platts APPEC 2021 conference. 

NEWS

Equinor has more than doubled its crude oil volumes supplied to Asia since 2017, with last year seeing a 30% growth year on year despite the COVID-19 pandemic, a company official said on Monday.

Up to 90% of British fuel stations ran dry across major English cities on Monday after panic buying deepened a supply chain crisis triggered by a shortage of truckers that retailers are warning could batter the world's fifth-largest economy. 

Global oil demand is expected to reach pre-pandemic levels by early next year as the economy recovers, although spare refining capacity could weigh on the outlook, producers and traders said at an industry conference on Monday. 

Top African oil exporters Nigeria and Angola will struggle to boost output to their OPEC quota levels until at least next year as underinvestment and nagging maintenance problems continue to hobble output, sources at their respective oil firms warn. 

Widening power shortages in China have halted production at numerous factories including many supplying Apple and Tesla, while some shops in the northeast operated by candlelight and malls shut earlier as the economic toll of the squeeze mounted. 

Venezuela has agreed to a key contract to swap its heavy oil for Iranian condensate that it can use to improve the quality of its tar-like crude, with the first cargoes due this week, five people close to the deal said. 

(Reporting by Florence Tan; editing by Uttaresh.V) ((Florence.Tan@thomsonreuters.com; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))


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