Surgut sells Nov-loading Russian ESPO crude at six-year-high premiums -sources

Surgutneftegaz, one of Russia’s largest oil producers, has sold four cargoes of ESPO Blend crude at premiums above $7 a barrel to Dubai quotes, the highest level seen since late 2013, several trade sources told Reuters on Wednesday.

Premiums were about $7.20 a barrel in the Surgut tender that closed late on Tuesday, three of the sources said, up more than $2 a barrel, about 50%, from previous trades for ESPO crude cargoes loading in late October.

Trading house Glencore bought three of the cargoes, while one went to China’s Unipec, two of the sources said.

Companies do not typically comment on such commercial matters.

The four 740,000-barrel cargoes were offered to load over Oct. 31-Nov. 5, Nov. 3-8, Nov. 6-12 and Nov. 10-16.

The surge in spot premiums for the sweet, light – or low-suphur – ESPO crude came after Saturday’s attacks on top oil exporter Saudi Arabia’s oil facilities that hit Saudi’s Arab Light and Arab Extra Light crude production and threatened global oil supplies.

Asian oil buyers consume more than 70% of total Saudi crude exports.

Spot trades in Surgut’s ESPO crude were closed before Saudi Arabia’s energy minister said the kingdom will restore lost oil production by the end of the month.

Front-month November Cash Dubai rose to a four-month high of $67.55 per barrel on Tuesday in S&P Platts’ market-on-close (MOC) price assessment after two strong sessions in the wake of the attack on Saudi sites.

Prior to the trades, Lukoil’s trading arm Litasco sold one ESPO crude cargo for loading late October at a premium of $4.70-$4.80 a barrel and Gazprom sold one cargo of October-loading ESPO crude at a premium of about $4.90 a barrel.
Source: Reuters (Reporting By Shu Zhang and Florence Tan Editing by Subhranshu Sahu and David Goodman)