Crude Benchmarks edge up ahead of expiry

Middle East crude benchmarks Dubai, Oman and Murban edged up on Wednesday, days before the contracts expire for the month.

CHINA

China’s mega private refineries are expected to operate at full processing rates or higher until April as their margins have improved after the government lifted COVID-19 restrictions, company officials said on Wednesday.

ZPC’s 800,000 barrels per day (bpd) refinery in Zhoushan city increased its run rate to 100% in February, a company official said, adding that run rates should be “no lower than that now”.

Hengli’s 400,000 bpd refinery in the city of Dalian is operating at 107% to 108%, a company official said.

Separately, Saudi Aramco’s new refinery deal to buy a 10% stake in private Chinese chemical group Rongsheng Petrochemical includes agreements on crude oil storage in eastern China and the supply of plastics and petrochemicals to the Middle East energy giant.

Under the Saudi’s first storage agreement in China, ZPC will provide Aramco 3 million cubic metres (about 18.6 million barrels) of storage space in east China port Zhoushan, Rongsheng said in a statement on Tuesday to the Shenzhen Stock Exchange outlining further details of the refinery deal.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps rose 39 cents to $1.41 a barrel. The benchmark remained well supported by bids from Total, PetroChina and Phillips 66.

Vitol will deliver a May-loading Upper Zakum crude cargo to Total following the deals.

This brings the total number of cargoes delivered on window this month to 14 – including 10 Upper Zakum cargoes and two cargoes each of al-Shaheen and Oman. PetroChina and Total are the top buyers this month.

NEWS

Large inflows of Russian crude oil and refined products have boosted tank storage demand at the United Arab Emirates’ Fujairah, pushing storage fees at the transit and blending hub to all-time highs in the first quarter, industry sources said.

Australia’s gasoline and diesel imports are expected to rise 2% to hit a record for a second straight year due to a drop in domestic production and a post-COVID economic recovery boosting fuel demand, traders, analysts and an industry source said.

The U.S. could start buying back crude oil for the Strategic Petroleum Reserve late this year after President Joe Biden last year directed the largest ever sale from the stockpile, Energy Secretary Jennifer Granholm said.
Source: Reuters