Middle East Crude-Benchmarks gain; Russian ESPO premium jumps $1

Middle East crude benchmarks gained for a second session on Thursday

  

SINGAPORE- Middle East crude benchmarks gained for a second session on Thursday as firm margins and robust China demand offset seasonally lower demand from other north Asian buyers.

Spot premiums for September-loading Russian ESPO crude jumped about $1 a barrel from the previous month as demand from Chinese independent refiners rebounded, trade sources said.

Russian producer Surgutneftegaz has sold two cargoes at $4.90 to $5.00 a barrel above Dubai quotes, they said, much higher than premiums of $3.65 to $4.10 a barrel seen in the company's last tender for August-loading cargoes.

Buyers of the cargoes loading on Aug. 31 to Sept. 5 and Sept. 4 to 9 were not immediately known.

China's crude demand has rebounded recently as refining margins have improved, the trade sources said, adding that independent refiners had snapped up cargoes for delivery in September and October.

These refiners also received their second batch of quotas at the start of July which will need to be used up by the end of the year, they said.

The premium for Russian crude Sokol has also risen after Itochu sold a September-loading cargo at $5.20 a barrel above Dubai quotes, up from earlier deals at premiums of $4.40-$4.90.

Separately, Basra Heavy's premium held firm after Petronas sold 2 million barrels of the oil for loading in August at a premium close to $2 a barrel to its official selling price (OSP), traders said.

Qatar Petroleum has also sold two al-Shaheen crude cargoes for loading in September via a tender at $1.80-$1.90 a barrel above Dubai quotes, down from premiums of above $2 in the previous month, traders said.

Unipec and Idemitsu may have bought the cargoes, one of the traders said.

ASIA-PACIFIC: Condensate discounts narrowed after naphtha cracks improved.

Indonesia's TPPI has bought two North West Shelf (NWS) condensate cargoes from ExxonMobil and Shell at a discount of about $2.50 a barrel to dated Brent for September delivery, traders said. This would be equivalent to a discount of about $3.50 a barrel to dated Brent on a free-on-board basis, narrower than discounts of more than $4 in the previous month.

WINDOW: Cash Dubai's premium to swaps rose 7 cents to $1.47 a barrel. Unipec will deliver a third Upper Zakum crude cargo to Shell following the deals.

NEWS

Packers Plus Energy Services, a company built on the North American shale oil boom, is turning to the Middle East to weather a new round of spending cuts by producers amid warnings of a looming oil glut.

Oil product inventories in the Singapore storage and trading hub fell to an eight-month low in the week ended July 17, official data showed, in one of the latest signs that suppliers are gearing up for cleaner to-be-launched marine fuel rules. 

China's West Pacific Petrochemical Corp, or WEPEC, is set to export 900,000 barrels of gasoline to Mexico this month amid a growing glut of the motor fuel at home, according to an industry source with direct knowledge of the matter. 

Kinder Morgan Inc will go ahead with a South Texas pipeline connection that would transport crude from Phillips 66's 900,000 barrel-per-day (bpd) Gray Oak pipeline in the Permian Basin to delivery points at the Houston Ship Channel, the company said on Wednesday.

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


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