Middle East Crude-Benchmarks drop on demand concerns, high freight rates bite

Middle Eastern benchmarks Oman, Dubai and Murban fell on Tuesday as markets were concerned about waning oil demand, while high tanker freight rates also curbed buying interest from refiners.

Spot premium for Oman, a medium sour crude mostly lifted by Chinese refiners, plunged to $1.75 a barrel over the Dubai quotes, its lowest level since late August.

State refiners in China, which cashed in on lucrative fuel exports earlier in the year, see little incentive to boost throughput as Beijing is unlikely to release more fuel export permits this year.

State-run refiners will likely cut this month’s throughput by about 7% from October rates to between 9.69 million and 9.95 million bpd, according to estimates by Chinese consultancy JLC and Longzhong.

China’s official data showed on Tuesday that the country imported 48.97 million metric tons, or 11.53 million barrels per day (bpd), of crude oil in October, up from September, but lower than August’s peak of 12.43 million bpd.

Freight rates for Very Large Crude Carriers (VLCCs) hauling oil from the Middle East to China reached w70 from w36.5 two months ago, Simpson Spence Young data on Refinitiv Eikon showed.

OSP

Indonesia has set the official Indonesia Crude Price (ICP) for Minas crude oil at $89.98 a barrel for October, down $3.90 from the previous month, a document from the Ministry of Energy & Mineral Resources showed.

The October Minas alpha, or price difference to dated Brent, was set at minus $1.07 cents a barrel, down 95 cents from a month earlier, the document which was seen by Reuters showed.

NEWS

Saudi Aramco 2222.SE on Tuesday reported a 23% fall in third-quarter net profit on the back of lower oil prices and volumes sold, marginally beating analyst estimates and helping prop up its shares in early trade.

Venezuela’s state-owned PDVSA is in talks with local and foreign oilfield firms to hire equipment and services that would allow it to revive depressed output, sources close to the meetings said, after the U.S. relaxed sanctions on the country.

China’s commerce ministry on Tuesday said it will require traders of crude oil, iron ore, copper concentrate and potash, which are subject to import licences, to submit real-time information on shipments as part of efforts to stabilize trade.

U.S. crude oil refiners this quarter will pull back from red-hot summer run rates as weak gasoline margins and plant overhauls cool operating goals, according to company statements and oil analysts.
Source: Reuters (Reporting by Muyu Xu)