Middle East Crude-Benchmarks slip; Vitol to deliver two cargoes

Asian oil refiners' margins have slumped to the lowest in nearly five months

  

SINGAPORE- Middle East crude benchmarks Dubai slipped for a third straight session on Monday, while DME Oman slumped amid low liquidity as trade for the month winds down.

Vitol will deliver two January-loading cargoes following the deals. These include an al-Shaheen crude cargo to Gunvor and an Upper Zakum crude cargo to Lukoil.

REFINING MARGINS

Asian oil refiners' margins have slumped to the lowest in nearly five months amid worries that the Omicron coronavirus variant could deal another blow to oil demand recovery, already hit by rising COVID-19 cases in Europe. 

Governments worldwide imposed travel curbs on travellers from southern Africa during the weekend to limit the spread of Omicron, first detected in South Africa. Scientists are racing to find out whether it is more transmissible or causes more severe disease than existing variants.

The development comes as refiners' margins in Asia and Europe had already taken a hit in recent weeks as many European countries reimposed coronavirus curbs to contain surging COVID-19 cases.

Singapore's complex margins, a barometer for Asian refiners' profitability, stood at $2.15 a barrel on Friday, the lowest since June 30, Refinitiv data showed.

Just a month ago, margins peaked at $8.45 a barrel, the highest since September 2019. 

"We are seeing drastic drops in refining margins over the past few days due to concerns over the Omicron variant," said an official at a major South Korean refiner, pointing to the growing number of countries imposing travel restrictions as a result of the new variant.

"From a refinery's end, we are facing a double whammy – drops in oil prices and refining margins, which would likely worsen our profitability."

NEWS

OPEC and its allies have postponed technical meetings to later this week, giving themselves more time to assess the impact of the Omicron variant on oil demand and prices, according to OPEC+ sources and documents. 

India said on Friday that oil producing countries cannot hold consumers to ransom, underlining the nation's growing frustration with OPEC+ for not raising production to cool prices. 

Indonesia is putting eight new oil and gas blocks located across the archipelago up for bids, Tutuka Ariadji, the director general of oil and gas at the country's energy ministry, said on Monday. 

CNOOC Ltd, a listed branch of China National Offshore Oil Corp (CNOOC), said on Monday it had started production at the second phase of its Buzzard project in Britain.

Further shipping talks are scheduled for next year after delegates at a U.N. agency meeting that sought to speed up decarbonisation of the sector failed to make progress, officials said on Friday.

(Reporting by Florence Tan; Editing by Shailesh Kuber) ((Florence.Tan@thomsonreuters.com; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))


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