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Middle East Crude-Benchmarks rise but compete with other grades

Middle East crude benchmarks rose on Tuesday but prices were capped amid increased competition from West African and United States crude cargoes for Asian buyers.

Recent shifts in the relative price of different crude grades have dealt oil exporters from the vast Atlantic Ocean basin the best chance in months to sell to the top consuming region, Asia, but sales have been sluggish as COVID-19 fears cool demand.

The Omicron coronavirus variant has curbed oil consumption in Asia just as U.S. and West African sellers pinned their hopes on the changing market structure paving an easier path eastward than competing oil from the Middle East.

Sales of Nigerian and Angolan oil to India have picked up along with sales of U.S. WTI Midland crude to East Asia.

Traders said Chinese buyers would not be easily tempted by more affordable barrels, with independent refiners allocated slimmer import quotas this year and state companies already well supplied.

Meanwhile, two cargoes of Australia’s North West Shelf (NWS) condensate are scheduled to load in February, down from the previous month, a preliminary loading programme showed on Tuesday.

China’s imports of crude oil rebounded in November from the previous month’s lows, but were still about 8% below the levels of a year earlier, customs data showed on Tuesday, as fresh quotas let refiners bring in imports held in anchored vessels.

WINDOW

Cash Dubai’s premium to swaps was at $2.09 a barrel.

SELLER-BUYER PRICE Reliance-Total 73.15 Koch-Total 73.15 Koch-Total 73.15 Vitol-Total 73.15 Vitol-Total 73.15 Unipec-Total 73.19 Reliance-Gunvor 73.15 Exxonmobil-Total 73.19 Unipec-Total 73.20 Vitol-Total 73.20 Reliance-Total 73.19 Vitol-Shell 73.15 Exxonmobil-Total 73.19 *Unipec-Total 73.20 *Oman partial

PRICES ($/BBL)

CURRENT PREV SESSION DME OMAN 73.20 70.14 DME OMAN DIFF TO DUBAI 2.12 2.17 CASH DUBAI 73.17 70.05

NEWS

– BP supports the addition of U.S. oil crude grade WTI Midland to global dated Brent, suggesting the removal in the medium-term of Brent and Forties grades from the benchmark as flows have evaporated, according to a document seen by Reuters.

– Yemen’s Houthi movement said on Tuesday it has fired several ballistic missiles and 25 armed drones on Saudi Arabia, including at Aramco facilities in Jeddah and the defence ministry in Riyadh.

– Iraq’s oil minister said on Monday that he expects oil prices to reach over $75. Ihsan Abdul-Jabbar added in a televised interview with state TV, that OPEC is trying to “control the energy market, in a positive way” that maintains the interests of all parties, consumers and producers.

– A global energy conference devoted to future technologies and low-carbon strategies kicked off in Houston on Monday with top executives from energy companies affirming the need for more oil for decades to come.

– Russia is considering banning foreign vessels from shipping Russian energy cargoes via the Northern Sea Route, as well as from icebreaking and coastal navigation, the Kommersant newspaper reported on Tuesday, citing a draft government resolution.
Source: Reuters (Reporting by Jessica Jaganathan; Editing by Amy Caren Daniel)

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