Thursday, 26 March 2015 17:24
SINGAPORE: DME Oman firmed slightly in the Middle East crude market on Thursday after global prices surged on growing conflict in Yemen.
Saudi Arabia and Gulf region allies launched military operations including air strikes in Yemen, officials said, to counter Iran-allied forces besieging the southern city of Aden where the US-backed Yemeni president had taken refuge.
There is a concern that the crisis could escalate, exacerbating wider sectarian conflict in the Middle East.
Trade sources said there was ample crude supply in global markets to replace any drop in exports to buyers such as China as long as the conflict did not cause broader disruption.
Yemen exports 1.4-1.5 million barrels of Masila crude each month, mainly to China. But a Chinese trade source said that volume was relatively small and could easily be replaced with West African crude.
For Russian grades, exports from the Pacific port of Kozmino will hold steady at 27 cargoes in May, same as the record level reached in April, a preliminary loading programme obtained by Reuters showed.
Record supply of the Russian grade to Asia has depressed its spot premium by about $ 1 to Dubai quotes for cargoes loading in May from the previous month, traders said.
Surgutneftegaz has sold three cargoes via a tender at $ 1.85-$ 2.30 a barrel above Dubai quotes to Petro-Diamond, Glencore and Itochu for May 10-14, 14-18 and 19-23 loading. It sold another two cargoes for May 23-26 and 27-30 via a tender that closed late on Wednesday at $ 2.30-$ 2.50 a barrel, a trader said, but the buyers were not immediately known.
Rosneft offered three ESPO cargoes for loading on May 8-11, 25-28 and May 29-June 1 in a tender to close on March 26 with bids valid until March 31.
DME OMAN
DME Oman for May settled at $ 56.95, up $ 4.08, by 0830 GMT. This puts DME Oman at 86 cents a barrel below Dubai swaps, against a discount of 97 cents in the previous session.
Dubai has set its official differential to Oman futures for May at a discount of $ 0.40 per barrel, the Dubai Department of Petroleum Affairs said.
MARKET NEWS
Iraq is planning to raise emergency funds by pre-selling oil reserves for the first time and will kick off economic reforms by revising its oil contracts with major Western companies, Finance Minister Hoshyar Zebari said.
Iran is storing at least 30 million barrels of oil on its fleet of supertankers as Western sanctions continue to keep a lid on sales, tanker market sources say.
Vietnam’s state oil and gas group PetroVietnam (PVN) is considering selling its 40 percent stake in a joint venture with Venezuelan counterpart Petroleos de Venezuela (PDVSA), according to two sources close to the exploration project.
Copyright Reuters, 2015
