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Middle East Crude-Slump in spot premiums draw demand

Middle East crude benchmarks Oman and Dubai were little changed on Wednesday after more refiners emerged to buy February-loading cargoes.

Spot premiums for Middle East grades have slumped by more than half from the previous month amid ample supplies from the Atlantic Basin and as OPEC+ producers will continue to increase output in January.

Sharply lower premiums have drawn buying interest from across Asia.

Reliance has bought 4 million barrels of Das crude for February loading at premiums of about $2 to $2.30 a barrel to Dubai quotes, trade sources said, down from premiums of over $5 in the previous month. Italy’s Eni is supplying 1.5 million barrels while PetroChina has sold 1 million barrels, they said. Reliance International Ltd (RINL), Total and Phillips 66 sold 500,000 barrels each, the sources said.

The refiner last lifted similar volumes of Das crude from Abu Dhabi in August, Refinitiv data showed.

PTT has bought a February-loading cargo of Murban crude at $2.30-$2.40 a barrel above Dubai quotes and is seeking more supplies in a tender closing on Wednesday. India’s IOC will also close a tender on Wednesday while Chinese refiner Rongsheng’s tender will close on Thursday.

India’s MRPL will close a tender to buy 1 million barrels of crude for March arrival on Dec. 20.

Separately, February-loading al-Shaheen crude has been sold at around $1.60 a barrel above Dubai quotes to a Chinese buyer prior to Qatar Energy’s tender, traders said.

For Russian grades, Sokol premium fell to 3-month low after ONGC sold a second February-loading cargo to a South Korean buyer at $4.20-$4.30 a barrel above Dubai quotes.

Surgutneftegaz has offered two ESPO crude cargoes for late January to early February loading in a tender to close later on Wednesday.


Environmental investigators have uncovered tens of millions of tonnes worth of illegally built crude oil processing and coking capacity in Shandong province, China’s top oil refining hub.

China’s daily crude oil throughput rebounded again in November as state refiners ramped up output to plug a diesel shortage and independent refiners also raised production on healthy margins, data showed on Wednesday.


India’s Reliance Industries Ltd, operator of the world’s biggest refining complex at Jamnagar in Western India, aims to get first parcel of oil from its recently floated Abu Dhabi-based trading unit in December, a source familiar with the matter said.

China’s coal output hit a record high in November as Beijing urged miners to ramp up production to ensure sufficient energy supplies in the winter heating season.
Source: Reuters (Reporting by Florence Tan; Editing by Krishna Chandra Eluri)

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