BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR PRIVACY & COOKIE NOTICE
X


Middle Eastern sour crude market under pressure on weak demand from Asian refiners

Singapore (Platts)--22 Jul 2014 522 am EDT/922 GMT


A combination of poor refining margins and autumn refinery turnarounds scheduled at several North Asian refiners has put pressure on the Middle Eastern sour crude market, with almost all grades trading at discounts to their respective official selling prices for September-loading barrels, traders said Tuesday.

A trader with an Indian refiner said there was "general weakness in the market. People are not buying too much; this is reflected in prices."

The spot market for Persian Gulf crudes typically trades two months forward, with cargoes from the September-loading programs clearing at a slow rate, traders said.

The first September trades of Upper Zakum -- Abu Dhabi's medium, sour crude grade -- were heard this week, with at least one cargo sold by ExxonMobil to Chinaoil at a discount of around 15 cents/b to its OSP, sources said.

Article continues below...


Platts 8th Annual European Refining Summit
September 23-24, Le Plaza, Brussels, Belgium

Platts European Refining Summit
Platts European Refining Summit Platts annual European Refining Markets has evolved to become bigger, better and more valuable than ever. Not only have we extended Europe's most prestigious refining event to 2 full days packed with even more exclusive sessions and the hottest panel debates, but we've also added extra networking opportunities - including our **New** Summit Dinner.

Register for Platts European Refining Summit


Murban -- Abu Dhabi's flagship light, sour crude -- was last heard bid at a discount of around 20 cents/b to its OSP, with sellers at around a 5-10 cents/b discount.

Das Blend, a blend of Abu Dhabi's Lower Zakum and Umm Shaif crudes, has been trading at around a 20 cents/b discount to its OSP, sources said.

Meanwhile, Japan's Fuji Oil was heard to have bought two September-loading cargoes of Qatar Land from Chevron and Unipec at discounts of 20 cents/b and 35 cents/b discount to its OSP, respectively.

Refining margins have been under pressure, particularly due to persistent weakness in gasoil cracks in recent weeks. This has led to refiners lowering run rates, while some refiners, particularly in South Korea, have increased their processing of straight run fuel oil as an alternative to crude oil, sources said.

"Korean spot demand doesn't feel robust," said a source at a trading house.

Another trader agreed, saying: "It is a terrible market, demand is very tepid ... we will limp through the month."

--Daniel Colover, daniel.colover@platts.com
--Edited by Deepa Vijiyasingam, deepa.vijiyasingam@platts.com




Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.