ADNOC Jan crude OSPs seen in line with market view
The official selling prices for Abu Dhabi National Oil Co’s January-loading crude were largely in line with market expectations, as it closely followed the spread between IFAD Murban futures and benchmark Platts Dubai over November, traders told S&P Global Platts Dec. 7.
January OSP for medium, sour Upper Zakum crude was set at a discount of $1.65/b to Murban crude OSP, compared with a discount of 95 cents/b in December.
“Looking closer ADNOC appears just to follow the spread between IFAD and Dubai last month for UZ [Upper Zakum] spread from Murban,” a trader with a North Asian refinery said.
The spread between IFAD Murban and Platts Dubai averaged $1.75/b in November, Platts data showed.
The lower differential for Upper Zakum shows weaker demand cues for Middle East medium, sour grades, sources said.
“UZ [Upper Zakum] sellers find it hard to place,” a trader with a South East Asian refiner said. “There were still UZ unplaced during the end of the trading window last month.”
Crude demand from Asia has been fairly stable, though the appetite from some major economies, such as China and Japan, is likely to lose momentum, the trader said.
Japan will roll into its refinery turnaround season post the winter buying frenzy, while China will gear up for a crude reserves release in the weeks ahead, with private Chinese refiners facing some government scrutiny, traders said.
The differentials for lighter grades — Umm Lulu and Das Blend — were unchanged from December at Murban plus 15 cents/b and Murban minus 30 cents/b, respectively.
Lighter crude grades margins have also weakened slightly, reflecting thinner buying interest in pockets of Asia, sources said.
“Now gasoline margin is weaker compared to kerosene and gasoil, so in this situation spread between lighter and medium crude grades are narrower,” the trader with the North Asian refinery said.
December gasoline cracks average $10.08/b in the month through Dec. 6, compared with $10.54/b for November, Platts data showed.
Unlike Saudi Aramco’s OSPs for January, which could make term crude expensive, leaving buyers eyeing spot barrels, ADNOC’s prices are not likely to help the spot market much, trade sources said.
ADNOC provided term buyers with full allocations for February-loading crude earlier in December, with one Indian buyer heard to have even received incremental volumes, a trader in Singapore said.
“I don’t think it will boost spot,” the trader in Singapore said.