|29 April, 2019

Middle East crude-benchmarks fall despite BP, Total purchases

Middle East crude benchmarks fell on Monday

SINGAPORE- Middle East crude benchmarks fell on Monday, a day before June contracts expire, despite purchases by BP and Total on Platts window.

ASIA-PACIFIC CRUDE: Spot premiums for June-loading cargoes held firm. Exxon Mobil may have awarded its Banyu Urip crude cargo to Reliance at a premium of about $6 a barrel to dated Brent, traders said.

Petronas sold Bertam crude cargo to Taiyo Oil at a premium of $5-$5.30 a barrel to dated Brent. ConocoPhillips sold its June Kimanis cargo to Ampol but the price was not immediately known, traders said.

Bunga Orkid and Bunga Kekwa cargoes were sold at premiums of $3.50-$4 a barrel and will eventually land in Thailand, they said.

PTT likely bought a Cossack crude cargo from Mitsui in its monthly purchase tender on behalf of Thai refiner IRPC, one of the traders said.

For Vietnamese crude, Binh Son refinery won the term supplies for TGT and Su Tu Den in the second half of 2019, while PV Oil Singapore may have also won part of the Su Tu Den term supplies, traders said.

RUSSIA: Sakhalin Energy has sold five cargoes loading in July to early August at their highest premiums in five months, two trade sources said.

The cargoes of Sakhalin Blend crude were sold at premiums of about $2 a barrel to the price of Middle East benchmark Dubai, they said, up from premiums of 50 to 60 cents for cargoes sold in the previous month.

End-users in Japan, China and South Korea bought the cargoes, the sources said.

Russia's Surgutneftegaz has issued a tender to sell five ESPO cargoes loading on June 12-16, 18-22, 21-25, 24-28, 23-30.

CONDENSATE: South Korea will likely return to a familiar game plan to replace Iranian oil it will no longer have access to after May now that the United States intends to tighten sanctions on Iranian exports. 

SK Incheon Petrochem Co Ltd, Hyundai Oilbank Corp and Hanwha Total Petrochemical are set to once again scan the world for alternative, but more expensive, condensate supplies and snap up heavy naphtha oil products for their processing units, known as splitters, industry sources and analysts said.

"Those who can bear the cost would make investments and switch their import sources, those who can't have to bite the bullet and use Qatari condensate," said Kim Jae-kyung, research fellow at the Korea Energy Economics Institute.

ARBITRBAGE: Trafigura exported its first-ever cargo of U.S. West Texas Light (WTL) oil last month, according to a source familiar with the matter, sending the shipment to South Korea, which has been testing this oil as a replacement for Iranian barrels. 

Trafigura, one of the largest exporters of U.S. crude, sold the cargo in March, the source said last week, asking not to be named.

WINDOW: Cash Dubai's premium to swaps fell to $1.56 a barrel, down 15 cents from Friday. This was the lowest since the middle of this month. A total 58 Dubai partials traded on Monday. Unipec, Shell and Petro-Diamond will deliver one Upper Zakum crude cargo each to BP, while Reliance will deliver an Upper Zakum cargo to Total.

NEWS

Exports of two Nigerian crude grades - Bonny Light and Amenam - are suffering significant disruptions following a turbulent week in the country's oil-producing Delta region, industry sources said on Monday. 

Russia's pipeline monopoly Transneft is investigating a case of contaminated oil, Russian President Vladimir Putin said on Saturday, adding that this could lead to a wider inquiry, possibly including law enforcement agencies.

Tighter U.S. sanctions on Iranian oil planned for May are adding to a wealth of factors curbing global supply of heavy-medium crude, driving up prices for scarcer barrels and setting up a stand-off between buyers and sellers. 

Air strikes hit the Libyan capital late on Saturday as eastern forces loyal to Khalifa Haftar pursued a three-week campaign to take Tripoli and also confirmed for the first time they had dispatched a warship to an oil port.

Anadarko Petroleum Corp, the U.S. oil and gas exploration and production company that agreed this month to sell itself to Chevron Corp for $33 billion, decided on Sunday to begin negotiations to sell itself to Occidental Petroleum Corp instead, according to people familiar with the matter. 

Pioneer Natural Resources is in advanced talks to sell its Eagle Ford acreage in South Texas to privately owned energy producer Ensign Natural Resources, five sources familiar with the matter said.

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

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