SINGAPORE- The Middle East crude market was mixed on Tuesday as DME Oman's premium to swaps soared to a multi-year high while cash Dubai softened.

DME Oman's premium rose more than $1 from the previous session to $4.22 a barrel on Tuesday, Reuters calculations showed.

Supply concerns ahead of U.S. sanctions against Iran and strong crude demand from China and Japan before winter have pushed up spot crude premiums this month.

But the more than $1 jump in Oman's premium puzzled industry players, given that it is occurring in a week when most of the oil industry is tied up with meetings at APPEC in Singapore.

Brent shot to its highest in four years on Tuesday, catapulted by imminent U.S. sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russia to raise output to offset the potential hit to global supply. 

REFINERY

China's refining capacity will grow to 880 million tonnes a year, equivalent to 17.6 million barrels per day (bpd), by 2020, 14 percent higher than 2017, said a senior researcher from oil company CNOOC. 

This will exceed demand for fuels by the world's largest energy consumer, creating surplus refining capacity of 136 million tonnes a year, Xu Yugao, director general at CNOOC's policy research office, said at APPEC.

Shandong's crude imports in September are expected to reach about 7 million tonnes - similar to January, when oil imports were at their highest this year, said Zhang Liu Cheng, general manager of the Shandong Refiners & Energy Group. 

 

NEWS

Energy trader Vitol will stop doing business with Iran after the United States re-imposes sanctions on Tehran's oil trade from Nov. 4, a senior company executive said. 

OPEC Secretary-General Mohammad Barkindo called for cooperation between the Organization of the Petroleum Exporting Countries and non-OPEC countries on Tuesday, warning that failure to do so could lead to one crisis after another. 

India's crude oil demand is forecast to grow to 500 million tonnes a year by 2040, but persistent increases in oil prices might act as a dampener, said Partha Ghosh, an executive director at Indian Oil Corp. 

The International Maritime Organization (IMO) will not delay implementing a reduction in the amount of sulphur in marine fuel in 2020, an IMO official said. 

The marine construction unit of state-owned China Communications Construction Company (CCCC) on Tuesday signed an agreement to work with Singapore-based commodities trader Zenrock Group to purchase fuel. 

U.S. sanctions on Iran will tighten global oil supplies sharply until the end of the year, but a threat to world demand looms in 2019 from the U.S.-China trade war, said the head of BP's oil trading in Asia. 

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