SINGAPORE: The Asia-Pacific crude market remained supported by firm demand on Thursday while spot premiums for September-loading cargoes may rise to compensate for a weaker Brent benchmark.
For Russian grades, ample supplies of light crude and a narrowing of Brent’s premium to Dubai quotes have depressed spot premiums for September-loading cargoes.
RUSSIA: Spot premiums for Russian Sakhalin Blend crude oil dropped to their lowest so far this year, with producer Sakhalin Energy selling four
October-loading cargoes at premiums of $2.35 to just over $2.50 a barrel to Dubai quotes, trade sources said.
The Sakhalin Blend crude cargoes, to load on Oct. 8-14, Oct. 14-20, Oct. 20-26 and Oct. 25-31, were sold to end-users in China, South Korea and Japan, the sources said.
Sakhalin Energy plans to roll over a Nov. 1-7 cargo to the next month, the sources said.
Last month, Sakhalin Energy sold five cargoes loading in September to October at $2.80-$3.20 a barrel above Dubai quotes.
ARBITRAGE: Asian crude oil buyers are booking cargoes from Europe, the Mediterranean and Africa after a sharp drop in Brent crude’s value against Middle East benchmark grade Dubai made the shipments profitable, industry sources said.
Traders have booked at least 10 million barrels of Russian Urals, Kazakhstan’s CPC Blend and North Sea crude to load in August for China and South Korea, while also eyeing West Africa and Libya supplies for Asia, said several sources with knowledge of the deals, including two involved in some of the trades.
“The arb (arbitrage) is open,” said one of the sources, who buys crude for a North Asian refiner and has been making inquiries on the shipments.
“Light crude supply is abundant. There are so many cargoes available so we have to look at their economics,” he said. There are also US grades to choose from, he said.
Unipec, the trading arm of Asia’s largest refiner Sinopec, has bought about 4 million barrels for loading in August, made up mostly of Russian Urals and some North Sea crudes, sources said.
South Korean refiner Hyundai Oilbank has bought about 2 million barrels of North Sea Forties crude to be delivered in late October, four months after its previous import in June, the sources also said.