Asian crude mart expected to remain under pressure<\/p>\n
SINGAPORE (Reuter): The Asian crude market is expected to
\nremain under pressure over the next week as refinery maintenance
\nshutdowns coupled with refinery run cuts reduce demand, traders
\nsaid yesterday.<\/p>\n
Only heavy sweet Asian crudes, burned directly for power
\ngeneration in north Asia, would see continued support from summer
\nutility demand, traders said.<\/p>\n
July trading for the heavy grades such as Indonesian Minas and
\nWiduri was expected to be completed by this week, with Japan and
\nChina soaking up most of the barrels, traders said.<\/p>\n
In contrast, the lighter crudes were languishing in a bearish
\nmarket, as limited buying interest from refiners has left July
\nbarrels uncommitted, even as buyers start looking for August
\nsupplies.<\/p>\n
Refinery maintenance shutdowns in Indonesia and Australia have
\nkept the July light Asian crude market amply supplied.<\/p>\n
Indonesia's 200,000 barrel-per-day (bpd) Balikpapan refinery,
\nwhich refines mainly light crudes was scheduled to start
\nmaintenance on 10 July, while Shell Australia will shutdown a
\n74,000-bpd crude distillation unit (CDU) at its 115,000-bpd
\nGeelong refinery from 12 July.<\/p>\n
Weak refinery margins also led to refinery run cuts by Shell
\nSingapore and Japan's Cosmo Oil, exacerbating the weak crude
\nmarket.<\/p>\n
New Zealand's Maui condensate and light sweet Harriet\/Cooper
\nBasin crudes from Australia, which would normally be consumed in
\nIndonesia and Australia, were left stranded in the spot market.<\/p>\n
These cargoes, including an end-July cargo of Malaysian Tapis
\ncrude were likely be rolled over into August as most refiners'
\nJuly requirements have been covered.<\/p>\n
But traders expected limited improvement in the August market,
\nsince more than 500,000 bpd of arbitrage crudes from the west are
\nscheduled to arrive in that period, competing with Asia's usual
\ncrude supplies.<\/p>\n
The bearishness seen in the July Middle East market,
\nespecially the Oman and Abu Dhabi crudes, was likely to extend
\ninto the August market which should fully start trading this
\nweek, traders said.<\/p>\n
\"The market was at a standstill in the last week as sellers
\nwanted higher prices, but buyers wanted the discounts done in
\nJuly,\" said a western trader.<\/p>\n
\"The buyers have moved their bids to more reasonable levels
\nnow, but the market is still very weak,\" he said<\/p>\n
Last week, sellers of Oman crude were offering around MPM -20
\ncents, while buyers were holding out for MPM -50.<\/p>\n
The depressed Middle East crude market was reflected in the
\nprice of Dubai crude offered in the Indian Oil Corporation's
\n(IOC) August purchase tender that was awarded on Friday.<\/p>\n
The Dubai cargoes offered ranged from levels at par to first
\nhalf month quotes to discounts of 7 cents under first-half month
\nquotes.<\/p>\n
In IOC's last purchase tenders for May, June and July cargoes,
\noffers of Dubai were at premiums over the first half-month
\nquotes.<\/p>\n
Some traders had hoped that the end of peak maintenance
\nshutdowns in Japanese and Korean refineries would help strengthen
\nthe August market for Middle East crudes, but were doubtful now.<\/p>\n
\"Asia's refining capacity has increased by one million barrels
\nper day in the last year, which means an additional demand of one
\nmillion barrels per day of crudes, either from West Africa or
\nfrom Middle East,\" said a western trader.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-crude-mart-expected-to-remain-under-pressure-1447893297",
"image": ""
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