Benchmark cash Dubai was assessed higher at the Asian close Jan. 19 as trade activity for March-loading cargos was bolstered by a spate of buy-sell transactions.
S&P Global Platts assessed March cash Dubai at a premium of 53 cents/b to the same-month Dubai futures, up 22 cents/b from the close on Jan. 18.
Similarly, March cash Oman was valued at a premium of 53 cents/b to front-month Dubai futures, up 22 cents/b from the previous day.
With most of the month seeing subdued interest for Middle East crude, the market awaited fresh cues that could stir up demand and clear the supply overhang.
Iraq’s State Oil Marketing Organization issued a tender that closed Jan. 18 offering two million barrels each of Basrah Light and Basrah Medium crude for February loading.
The new grade, Basrah Medium, was heard bought by Chinese buyers at a premium of 70 cents/b to the official selling price while Basrah Light was heard sold at a nominal discount to the OSP. The information could not be immediately confirmed.
Malaysia’s Petronas was heard to have sold a cargo of February-loading Basrah Light crude at a discount of 10 cents/b to traders.
Thailand’s IRPC issued a tender for purchase of various grades of sweet and sour crude for March loading. The tender closes Jan. 19 with next-day validity.
Russia’s Surgutneftegaz offered three March-loading ESPO crude cargoes, which were heard bought by Chinese buyers and traders at premiums of $1-$1.10/b to Platts front-month Dubai crude assessments, FOB.
The uptick in trade activity also helped spot differentials, which had flipped into discounts from high premiums last month.
“Heard that Japanese buyers bought a lot of Murban and Das crude. This has helped spot differentials, and expect them to trade at smaller discounts of minus 10 cents/b or thereabouts,” said a trader with a north Asian refiner.
As March-loading trade wraps up, market participants will hope for more last-minute buying, especially from Chinese refiners, who have curbed demand on the back of COVID-19 outbreaks and refinery turnarounds.
“Maintenance season in China has slowed down the buying activity. However, if like last month Rongsheng issues a tender this week, things could change for the better,” said a trader in Singapore.
The Platts Market on Close assessment process on Jan. 19 saw six 25,000-barrel Dubai partial and one 25,000-barrel Oman partial traded.
The Dubai partials were traded with Shell, Reliance, Unipec and PetroChina on the sell side and Total on the buy side. The Oman partial was sold by Unipec to Total.
This was the first Oman partial trade for January. No convergence has been declared in January so far.
A convergence occurs when 20 partials are traded between two counterparties, resulting in a full, 500,000-barrel physical cargo being declared from the seller to the buyer.