Middle East Crude-Benchmarks extend losses on demand fears

Middle Eastern benchmarks extended losses on Wednesday over weak demand concerns from the world’s top oil consumers and over increasing pressure from arbitrage cargoes as the Brent/Dubai Exchange for Futures for Swaps (EFS) reached the narrowest level in more than two months.

Spot premiums for Oman, Dubai and Murban fell to their lowest levels in at least three months.

Data from the U.S. showed the crude inventory is piling up but fuel demand is expected to decline.

As a result of demand concerns in the west of the Suez market, the spread between Brent- and Dubai-pegged oil narrowed to $0.20 a barrel on Wednesday, compared with an average of $2.13 a barrel in October.

A narrower Brent/Dubai spread makes hauling oil from the Atlantic and America more economical for Asian refiners.

In the east, export prices for Russia’s ESPO Blend crude have slipped to a discount to benchmark Brent in Chinese ports as demand from top buyer China eases and freight costs have jumped after the U.S. sanctioned two shipowners, three market sources told Reuters.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps fell 34 cents to $1.45 a barrel.

NEWS

Venezuelan state oil firm PDVSA and its joint venture partner Maurel & Prom MAUP.PA have signed an agreement aimed at increasing crude and gas output in Venezuela’s western region, PDVSA’s CEO said on Tuesday.

Kazakhstan is ready to transport more Russian oil and gas, President Kassym-Jomart Tokayev told Russian daily Izvestia in remarks published early on Wednesday, a day before President Vladimir Putin was set to visit his country.

Japan’s top refiner, Eneos 5020.T, on Wednesday raised its net profit forecast to 240 billion yen ($1.6 billion) for the year ending in March 2024 as higher oil prices and a weaker yen are set to support results after a drop in its quarterly profit.

Nigeria’s state oil firm NNPC Ltd on Tuesday said it had launched a new grade of crude called Nembe, as Africa’s largest oil producer aims to ramp up crude production.
Source: Reuters (Reporting by Muyu Xu; Editing by Sohini Goswami)