Russia’s Nov ESPO Blend crude oil exports fall 4% on month at 2.6 mil mt
Russia’s exports of the medium sweet ESPO Blend crude in November are expected to total 2.6 million mt, down 3.7% from October, according to the latest monthly loading program.
ESPO Blend’s November program runs from October 30 to December 1 and will comprise 26 cargoes of 100,000 mt each.
In comparison, the October program, which runs from September 30 to November 1, comprises 27 cargoes of 100,000 mt each, or 2.7 million mt in total.
The November-loading rate will average 577,515 b/d, down from 582,088 b/d scheduled for October.
State-owned Rosneft holds 11 cargoes for November, similar to the October program, and has not issued a tender for the November-loading program, market sources said.
Russia’s Surgutneftegaz holds eight cargoes for November loading, up from seven in the October loading program.
Surgut sold all its November-loading cargoes via three tenders, sources said. A 100,000 mt cargo for loading over October 31-November 5 was sold to an unknown buyer at a premium of around $4.85/b to Platts front-month Dubai crude assessments, they said. Another 100,000 mt for loading over November 3-8 was sold to an unknown buyer at a premium of around $5.95/b to Dubai crude assessments, they added.
ESPO premium surged by more than $1/b within a week on strong buying interest from Chinese independent refiners, market sources said.
Surgut also sold its remaining six cargoes via tender for loading over November 8-12, November 12-16, November 14-18, November 18-22, November 23-27 and November 25-29 at a premium ranging between $6/b and $6.40/b to Dubai crude assessments, sources said. The buyers were heard to be a Chinese trading house and Japanese users, sources added.
Small producers including Swiss-based Tenergy hold five cargoes for November, down from six in the previous month, and Lukoil has one cargo, according to the program.
Russia’s Gazprom Neft holds one cargo according to the program and has sold it via tender for loading over November 3-13 to an unknown buyer at a premium of around $5.50/b to Dubai crude assessments, market sources said.
Overall, November-loading ESPO Blend cargoes were sold at a premium of around $4.85/b to as high as $6.50/b to Dubai crude assessments, near five-year highs, and up from a premium of $3.50-$3.70/b for October-loading cargoes.
Growing demand from Chinese independent refiners coupled with a strong market structure for Dubai-linked grades have pushed up the premium, market sources said.
Chinese independent refiners may be trying to use up their crude import quotas before the end of the year, sources said.
Market participants were skeptical about the premiums continuing at this level for the coming months, given stable supply and the possibility of an arbitrage window for competing grades.