SINGAPORE- Middle East crude benchmarks fell on Thursday, extending declines for a third straight session, but spot premiums for medium grades held firm, supported by demand for sour grades in Europe and Asia amid OPEC cuts.

Iraq's SOMO has sold 2 million barrels of Basra Light crude for end-February loading at a strong premium of $1.30-$1.40 a barrel to its official selling price (OSP), trade sources said.

Exxon Mobil has likely bought the cargo loading on Feb. 27-28, which is expected to head to Europe, they said.

Tighter sour crude supplies in Europe and competitive Basra crude prices against similar quality Russian Urals have supported Basra's crude premiums, one of the sources said.

CPC bought March-loading Upper Zakum crude via a tender at parity to 5 cents a barrel above its OSP, trade sources said. It was not immediately clear how many cargoes the Taiwanese refiner bought.

 

ARBITRAGE: Brent crude's premium to quotes for Middle East crude benchmark Dubai fell on Thursday to close to 70 cents a barrel, the narrowest spread between the two grades since July 2017, according to two trade sources and Refinitiv Eikon data. 

The narrower price spread will support Asia's demand for crude oil from the Atlantic Basin that are priced off Brent while dampening Asian oil buyers' appetite for Dubai-linked grades from the Middle East and Russia.

Crude oil markets in Europe and West Africa have made a strong start to 2019 as Libyan supply losses and strong demand in Asia offset rising U.S. exports. 

Nigeria's biggest crude grade, Qua Iboe, was being offered this week at a $2 per barrel premium to benchmark dated Brent, a 10-month high. In the North Sea, Forties crude reached its highest since October on Monday. 

 

ASIA-PACIFIC & RUSSIA CRUDE: Rosneft issued a tender to sell an ESPO cargo loading on March 11-16. Petronas closed a tender on Thursday to sell 300,000 barrels of Bertam crude for loading on March 26-30.

REFINERY

Japanese refiners will continue to lift oil from Iran through March after receiving a waiver from U.S. sanctions on crude imports in November, Takashi Tsukioka, president of the Petroleum Association of Japan (PAJ) said on Thursday. 

Sinopec's Shanghai refinery has produced its first batch of low-sulphur bunker fuel totaling 6,000 tonnes, the company's official newspaper said in a report on Wednesday. 

 

NEWS

U.S. oil producers sought on Wednesday to soothe OPEC's worries about losing market share, telling the group that investors in the U.S. firms wanted a reduction in growth and higher payouts. 

Potential U.S. sanctions on Venezuela's crude oil exports would cut off the nation from Gulf Coast refiners that are among its biggest customers, likely forcing it to send more crude to China, India or other Asian countries, traders said. 

Russia's largest oil producer Rosneft halted oil production at more than 1,200 wells after fire hit its biggest oilfield, Priobsky, earlier this month, a source with knowledge of the shutdown told Reuters on Wednesday. urn:newsml:reuters.com:*:nL8N1ZN4UT

The U.S. government shutdown has delayed Enterprise Products Partners LP's plan to build a major U.S. crude export terminal off Houston, blocking the pipeline operator from filing paperwork with U.S. regulators, an executive said. 

Belgian crude oil shipper Euronav NV said on Thursday it saw the return of a strong freight rate market during the fourth quarter, signalling a strong start to 2019. 

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