Middle East Crude-Benchmarks, ESPO premiums touch multi-month highs

Middle East crude benchmarks Oman and Dubai touched fresh highs in two months

  

SINGAPORE- Middle East crude benchmarks Oman and Dubai touched fresh highs in two months, while Russian ESPO's premiums jumped to multi-month highs on robust demand in Asia.

Asia's demand for Middle East and Russian crude has strengthened for December-loading cargoes on the back of stronger margins and a wider price spread between Brent and Dubai, which made oil from the Atlantic Basin more expensive.

Spot premiums for Russian ESPO crude ESPO-DUB jumped for a second straight month to hit a 22-month high on robust demand in Asia, according to trade sources and data on Refinitiv Eikon.

Russian oil producer Surgutneftegaz sold two December-loading cargoes in a tender late on Friday at $5.50-$5.60 a barrel above Dubai quotes, the sources said.

These are the highest premiums since trades in January 2020, according to data on Eikon.

A Japanese trading company and a European trader likely bought the cargoes, they said.

Surgut has issued a second tender to sell three cargoes loading on Dec. 6-13, 9-16 and 13-20 which will close later on Monday.

Last month, Surgut sold November-loading cargoes at premiums ranging from $4 to $4.70 a barrel. 

Separately, Taiwanese refiner Formosa Petrochemical issued a tender to buy December-loading sour crude which will close on Tuesday.

ASIA-PACIFIC CRUDE

PV Oil has sold the December-loading SDVN crude cargo to an oil major at a premium of just above $2 a barrel to dated Brent.

Petroleum Brunei has also sold its December-loading Kimanis crude to an end user although the price level was not immediately known.

REFINERY

A fire at Kuwait's Mina al-Ahmadi oil refinery on Monday injured several workers but operations were unaffected, Kuwait National Petroleum Company (KNPC) said. 

China daily crude oil processing rate fell again in September, to the lowest since May 2020, as feedstock shortage and environmental inspection crippled operations at refineries and a power crunch dampened refined oil demand from downstream users. 

U.S. refiners are expected to show higher earnings for the third quarter as margins to sell gasoline and diesel have improved despite the surging cost of crude oil, analysts said.

NEWS

China's power woes look set to intensify as coal prices rose to a record on Monday, following data showing supply of the fuel fell in September adding to concerns that domestic output may be unable to meet surging electric generation demand. 

Japan will urge global oil producers to increase output and take steps to cushion the blow to industries hit by the recent spike in energy costs, Prime Minister Fumio Kishida said on Monday.

India's gasoil consumption fell in the first half of October from the same period in the previous year, preliminary sales data showed. 

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


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