Spot premiums for March-loading Russian ESPO crude fall on weak China demand – sources
Spot premiums for Russian ESPO crude loading in March fell by about $1 a barrel from the previous month as China’s demand slowed ahead of Lunar New Year celebration, trade sources said.
Russian producers Surgutneftegaz and Paramount Energy sold several cargoes via tenders late last week at premiums between $6 and $6.50 a barrel to Dubai quotes, they said on Monday.
More ESPO cargoes will be sold via tenders from Rosneft and Surgutneftegaz later on Monday.
Chinese refiners typically slow down crude purchases before the Lunar New Year while refining margins have weakened, one of the sources said.
Buyers would have a better picture of their crude demand in early February when they return from Lunar New Year holidays, he said.
Asian buyers typically purchase crude cargoes for loading two months ahead of the calendar month.
ESPO crude demand was also expected to fall in the second quarter because of a scheduled turnaround at Dalian Petrochemical Corp, PetroChina’s subsidiary refinery and also the largest processor of ESPO oil.
China’s crude oil throughput rose to a record high in 2019 following the start-up of two mega-refineries, official data showed on Friday, with December posting the highest daily run-rate on record.
Source: Reuters (Reporting by Florence Tan in Singapore and Olga Yagova in Moscow; Editing by Christian Schmollinger and Alex Richardson)