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Asia-Pacific Crude-Firm on robust Thai demand

Asia-Pacific Crude-Firm on robust Thai demandSINGAPORE: The Asia-Pacific crude market held firm on Wednesday as robust demand from Thailand helped soak up excess supplies.

PTT bought several cargoes for delivery in early January including Labuan from Shell, Seria Light from Itochu and Kimanis from Lukoil, traders said. The Thai trader may have also bought a Kutubu cargo, they said, although details could not be independently verified.

Pertamina will close a tender on Wednesday to buy sweet crude for January delivery. The Indonesian refiner has earlier bought Qua Iboe from Shell.

Strong freight rates and robust demand from China have supported differentials for December-loading regional crude, although there are signs that the market may be cooling, a trader said.

“There are still some prompt cargoes available,” he said, adding that Chinese buyers may turn to ESPO, away from regional grades, after a sharp drop in premiums for the Russian crude.

Consultancy PIRA Energy said refinery maintenance and refiners’ need to reduce inventories for end-year accounting purposes will weigh on prices in the short term.

“Longer term, the market will increasingly need additional barrels, even after accounting for the return of Iranian barrels in spring 2016. By 2Q16, the market will have to begin signalling that more oil will be required and prices should begin a more sustained recovery by the second quarter next year.

Brent-Dubai Exchange of Futures for Swaps (EFS), or Brent’s premium to Dubai swaps, was at $ 2.14 and $ 2.24 for December and January, respectively.


Libyan forces controlling major eastern oil ports said on Tuesday they banned oil tankers loading at Zueitina terminal if vessels had contracts with the self-proclaimed government in Tripoli, in an escalation of a conflict for control.

Nigeria’s NNPC said on Tuesday it had cancelled bidding for new crude oil swap agreements and will instead directly sell crude oil to refiners, and purchase refined oil products from them.

Asian oil refining margins will be robust in 2016, but are unlikely to return to the heights they climbed earlier this year as crude prices have started to pick up, industry executives and analysts said.

Indonesia’s state energy company Pertamina plans to bid to upgrade fuel marketing facilities in Myanmar, a company official said on Wednesday, giving it an opening to sell oil products to its fellow Southeast Asian nation.

Copyright Reuters, 2015

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