Middle East Crude-Benchmarks retreat as fears of supply disruption ease

Middle East crude benchmarks Oman, Dubai and Murban dropped on Wednesday as fears eased about potential supply disruption from the battle between Israel and the Palestinian Islamist group Hamas.

While Israel produces very little crude oil, traders remained watchful that if the conflict escalates it could hurt Middle East supply and worsen an expected deficit for the rest of the year.

Saudi Arabia and Russia, the world’s top two oil exporters, will discuss the situation on the oil market and oil prices on Wednesday amid the escalating conflict between Israel and Hamas, Russia President Vladimir Putin’s top oil official said.

Risks of a broader geopolitical unease in the Middle East and a harsher sanction on Iranian oil seem to wind down. Chinese independent refiners are the biggest buyers of Iranian crude oil.

China has reaped savings this year of nearly $10 billion through record purchases of oil from countries under Western sanctions, according to Reuters’ calculations based on data from traders and shiptrackers.

Trades for December-loading Russian ESPO crude have started. Crude is offered at around $1 a barrel over ICE Brent on the deliver-ex-ship basis in China, slightly higher than November’s trading level of around $0.50 a barrel.

ASIAN REFINERIES

Vietnam’s largest refinery Nghi Son completed major maintenance at the facility on Wednesday, one week ahead of schedule, the company said.

The 200,000-barrel-per-day Nghi Son Refinery and Petrochemical will resume sales of refined fuels from Thursday, the company said in a statement.

SINGAPORE CASH DEALS

Cash Dubai’s premium to swaps dipped 10 cents to $2.82 a barrel.

PetroChina will deliver one December-loading Oman cargo each to Vitol and Equinor following the trades.

NEWS

A subsidiary of Hengli Petrochemical, China’s privately controlled refiner and petrochemical producer, has won a licence to supply bonded marine fuel in Zhoushan, the country’s bunker hub, a company spokesperson said on Wednesday.

Ultra low-sulphur diesel (ULSD) loadings from the Russian Baltic Sea port of Primorsk are set to rise in October to 0.7 million metric tonnes from 0.21 million metric tons in the previous plan, two traders said on Tuesday.

Total fuel and crude stocks held by European refiners stood at 1.02 billion barrels in September, down slightly from the previous month but up 3% from a year earlier, Euroilstock data showed on Tuesday.
Source: Reuters (Reporting by Muyu Xu; Editing by Sherry Jacob-Phillips)