SINGAPORE- Middle East crude benchmarks edged down on Thursday as ample supplies and lower demand during refinery maintenance season in autumn weighed on the market.

Oil flows from the Atlantic Basin to Asia may also rise after Brent crude's premium to Dubai swaps DUB-EFS-1M dropped to $2.77/bbl on Thursday, the lowest in seven months.

A narrower price difference between the two benchmarks could encourage Asian refiners to buy more Brent-linked grades from the Atlantic Basin and the Asia-Pacific region instead of Middle East and Russian grades priced off Dubai, likely weighing on their premiums, traders said.

 

IRAQ: Iraq has dropped the August official selling price (OSP) for Basra Light crude to Asia by $0.20 to plus $0.35 a barrel against the average of Oman/Dubai quotes from the previous month, the Oil Marketing Organization (SOMO) said. 

Basra Heavy to Asia in the same month was priced at minus $2.65 a barrel to Oman/Dubai quotes, SOMO said in an e-mailed statement.

The price adjustments were reasonable, traders said. July-loading Basra Light had been sold to an Indian buyer at 40 cents-50 cents a barrel below its original selling price (OSP), down from earlier trades at premiums of 30 cents-40 cents, after SOMO added cargoes to the July programme, they said.

MEXICO: Pemex has set the August K constant in pricing formula for Maya crude shipments to Asia at minus $6.50 from minus $7.25 in July. 

TENDERS: India's IOC has bought 2 million barrels of Basra Light crude and 1 million barrels of Banoco Arab Medium crude via its tender, trade sources said. Sellers and prices were not immediately known.

ARBITRAGE

U.S. crude oil exports to India hit a record in June and so far this year are almost double last year's total as the Asian nation's refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration. 

All told, producers and traders in the United States will send more than 15 million barrels of U.S. crude to India this year through July, compared with 8 million barrels in all of 2017.

AK Sharma, head of finance at Indian Oil Corp , the country's top refiner, said U.S. crude is gaining appeal because of its lower cost, and could expand further if China cuts its imports of U.S. energy.

"If China levies a tariff on U.S. oil, then U.S. imports to India will probably rise," he said. "We are looking for a mini-term deal to buy three to four cargoes of U.S. oil over a period of three to six months instead of buying single cargoes."

 

REFINERY

Formosa Petrochemical Corp plans to carry out maintenance at its No. 1 residue desulphuriser unit (RDS) in October, a company spokesman said. 

The unit at Mailiao, with a capacity of 80,000 bpd, will be shut until early November, he said.

NEWS

OPEC on Wednesday forecast world demand for its crude will decline next year as growth in consumption slows and rivals pump more, pointing to the return of an oil market surplus despite an OPEC-led pact to restrain supplies. 

OPEC President Suhail al-Mazrouei said on Wednesday that volatility in the crude market was undesirable and OPEC prefers a more stable price environment, speaking after crude had its biggest one-day drop in two years. 

U.S. crude oil stocks fell by nearly 13 million barrels last week, the most in nearly two years, dropping overall crude stocks to their lowest point since February 2015, the Energy Information Administration said. 

Glencore faces at least two lawsuits by U.S. shareholders accusing the big Anglo-Swiss mining company of having made false and misleading disclosures before it received a subpoena in a corruption probe, and its stock tumbled. 

(Reporting by Florence Tan, Editing by Sherry Jacob-Phillips) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))