Abu Dhabi term talks shadow crude oil market<\/p>\n
SINGAPORE (Reuters): The Asian crude market will be focused on
\ndevelopments in the Abu Dhabi term negotiations between equity
\nholders and their Asian buyers this week, since the spot market
\nis stuck in the inactive period between December and January,
\ntraders said yesterday.<\/p>\n
They said that heavy Asian crudes such as Indonesian Minas
\nwill be supported after the last December deals were done at ICP
\n+55 cents per barrel.<\/p>\n
But the lack of availabilities for December will keep trading
\nlackluster, they said.<\/p>\n
On the Abu Dhabi term negotiations, equity holders BP, Total
\nand Shell are offering a 14 cents per barrel premium to the
\ngovernment price set by Abu Dhabi National oil Co. (ADNOC) for
\nMurban contracts next year, down from 19 cents initially shown,
\ntraders said.<\/p>\n
They said that term buyers of Murban, the main Abu Dhabi
\ngrade, have been holding out for ADNOC +10.<\/p>\n
But it was expected that most of the contracts could be
\nsettled around the ADNOC +14 cents level.<\/p>\n
In 1997, the equity holders set their Murban term prices
\nbetween ADNOC +24 to ADNOC +29.<\/p>\n
Unlike Shell's Oman term contract, where a single price
\napplies to all term customers, the Abu Dhabi term prices vary
\nwith each customer.<\/p>\n
The equity holders have been holding talks for over a week,
\nbut only BP has signed a Murban contract with one buyer at ADNOC
\n+15 cents, traders said.<\/p>\n
Traders said the protracted negotiations was due to differing
\noutlooks on the crude market between the buyers and sellers.
\n"Sellers are quoting last year's premiums, but buyers are saying
\nthat the market is very different now," said a trader with a
\nmajor oil company.<\/p>\n
"The market has changed a lot," he added.<\/p>\n
Traders said that light Abu Dhabi crudes, which have
\ntraditionally been a a staple diet for Asian refiners, are now
\nfacing more competition from long-haul crudes from the west,
\nwhich has led buyers to push for term prices that are
\ncompetitive.<\/p>\n
Refiners in South Korea have been buying West African cargoes
\non a regular basis, while Chinese refiners are looking to buy
\nmore cargoes from Canada and South America, in addition to West
\nAfrican grades.<\/p>\n
Japanese refiners, who are normally more conservative, are
\nalso becoming increasingly inclined towards the West African
\ncrudes, which are more economic.<\/p>\n
Shell's Oman term contracts for 1998 illustrates Asian
\nrefiners' need for more competitive prices from their traditional
\ncrude suppliers.
\nShell set its Oman term price at MPM +7, a record low since Shell
\nstarted its term contracts in 1990.<\/p>\n
But the company lost around 40 percent from its 1997 term
\nvolumes of 250,000 barrels-per-day, as buyers said that the price
\nwas not competitive enough to lock in term volumes.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/abu-dhabi-term-talks-shadow-crude-oil-market-1447893297",
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