Middle East Crude: Benchmarks drop; Chinese teapots buy N. Sea, Guyana crude

Middle East crude benchmarks Oman and Dubai extended losses on Tuesday

  

SINGAPORE- Middle East crude benchmarks Oman and Dubai extended losses on Tuesday, with Dubai's differential sinking below minus $10 a barrel.

Major oil producers including Saudi Arabia and Russia are likely to agree to cut production at a Thursday meeting but only if the United States joins the effort aimed at coping with the disastrous effect of the coronavirus on fuel demand, three OPEC+ sources told Reuters on Monday. 

ASIA-PACIFIC CRUDE:

Indonesia set the official Indonesia Crude Price (ICP) for Minas crude oil at $35.78 a barrel for March, down $21.40 from the previous month, a pricing document showed on Tuesday.

ARBITRAGE:

Chinese independent refiners have snapped up rare crude grades from the North Sea and Guyana at low prices in an oversupplied market after the coronavirus pandemic destroyed demand, four sources with knowledge of the matter said on Tuesday.

The North Sea grades bought included Balder, Flotta and Chestnut crude, while Guyana's Liza crude was sold into China for the first time, the sources told Reuters.

Balder and Liza were sold at spot discounts of $7.30-$7.50 to ICE Brent for July arrival, while Flotta crude was sold at a discount of close to $7.00 to ICE Brent for late June arrival, the sources said. The price for Chestnut crude was not immediately available. 

REFINERY

PetroChina raised first-quarter oil and gas production at its upstream unit Tarim in northwestern China by nearly 8% to 7.91 million tonnes of oil equivalent, according to parent company China National Petroleum Corp. urn:newsml:reuters.com:*:nL4N2BV1NF

NEWS

Traders seeking to store oil have put their plans on hold this week after prompt Brent crude futures surged against future months and made storage uneconomical, despite overwhelming supplies in the market, industry sources said on Tuesday. 

President Donald Trump said on Monday that OPEC had not pressed him to consider asking U.S. producers to reduce their output as a way to support oil prices depressed by an economic downturn caused by the coronavirus pandemic. 

The U.S. government said on Monday it has not yet received requests to waive a 100-year-old law on shipping goods between domestic ports, despite some interested parties who say temporarily lifting the regulation would help energy companies hurt by the oil price plunge. 

Kuwait Petroleum Corporation (KPC) has informed Asian buyers that it will postpone the announcement of its crude oil official selling prices (OSP) for May by a "few days" beyond April 10, two sources with knowledge of the matter told Reuters on Tuesday. 

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

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